Water Code
TITLE 4. GENERAL LAW DISTRICTS
CHAPTER 49. PROVISIONS APPLICABLE TO ALL DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 49.001. Definitions.
(a) As used in this chapter:
(1) "District" means any district or authority created by
authority of either Sections 52(b)(1) and (2), Article III, or
Section 59, Article XVI, Texas Constitution, regardless of how
created. The term "district" shall not include any navigation
district or port authority created under general or special law
or any conservation and reclamation district created pursuant to
Chapter 62, Acts of the 52nd Legislature, 1951 (Article 8280-141,
Vernon's Texas Civil Statutes).
(2) "Commission" means the Texas Natural Resource Conservation
Commission.
(3) "Board" means the governing body of a district.
(4) "Executive director" means the executive director of the
commission.
(5) "Water supply corporation" means a nonprofit water supply or
sewer service corporation created or operating under Chapter 76,
Acts of the 43rd Legislature, 1st Called Session, 1933 (Article
1434a, Vernon's Texas Civil Statutes).
(6) "Director" means either a supervisor or director appointed or
elected to the board.
(7) "Municipal solid waste" has the same meaning assigned by
Section 361.003, Health and Safety Code.
(8) "Special water authority" means a river authority as that
term is defined in Section 30.003, or a district created by a
special Act of the legislature that:
(A) is a provider of water or wastewater service to two or more
municipalities; and
(B) is governed by a board of directors appointed or designated
in whole or in part by the governor, the Texas Water Development
Board, or municipalities within its service area.
(9) "Potable water" means water that has been treated for public
drinking water supply purposes.
(b) These definitions are for use in this chapter only and have
no effect on any other statute or code unless specifically
referenced by that statute or code.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.002. Applicability.
This chapter applies to all general and special law districts
to the extent that the provisions of this chapter do not directly
conflict with a provision in any other chapter of this code or
any Act creating or affecting a special law district. In the
event of such conflict, the specific provisions in such other
chapter or Act shall control.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.003. Penalty.
A district that fails to comply with the filing provisions of
this code may be subject to a civil penalty of up to $100 per day
for each day the district wilfully continues to violate these
provisions after receipt of written notice of violation from the
executive director by certified mail, return receipt requested.
The state may sue to recover the penalty.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.004. Penalty for Violation of District Rules.
(a) The board may set reasonable civil penalties for the breach
of any rule of the district that shall not exceed the
jurisdiction of a justice court as provided by Section 27.031,
Government Code.
(b) A penalty under this section is in addition to any other
penalty provided by the law of this state and may be enforced by
complaints filed in the appropriate court of jurisdiction in the
county in which the district's principal office or meeting place
is located.
(c) If the district prevails in any suit to enforce its rules,
it may, in the same action, recover reasonable fees for
attorneys, expert witnesses, and other costs incurred by the
district before the court. The amount of the attorney's fees
shall be fixed by the court.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
SUBCHAPTER B. CREATION
Sec. 49.010. Order or Act Creating District.
Within 60 days after the date a district is created, the district
shall file with the executive director a certified copy of the
order or legislative Act creating the district or authorizing its
creation, unless the district was created by order of the
commission.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.011. Notice Applicable to Creation of a District by the Commission.
(a) On receipt by the commission of all required documentation
associated with an application for creation of a district by the
commission under Chapter 36, 50, 51, 54, 55, 58, 65, or 66, the
commission shall issue a notice indicating that the application
is administratively complete.
(b) The commission by rule shall establish a procedure for
public notice and hearing of applications. The rules must
require an applicant to publish the notice issued by the
commission under Subsection (a) once a week for two consecutive
weeks in a newspaper regularly published or circulated in the
county where the district is proposed to be located not later
than the 30th day before the date on which the commission may act
on the application.
(c) The commission may act on an application without holding a
public hearing if a public hearing is not requested by the
commission, the executive director, or an affected person in the
manner prescribed by commission rule during the 30 days following
the final publication of notice under Subsection (b).
(d) If the commission determines that a public hearing is
necessary, the commission shall advise all parties of the time
and place of the hearing. The commission is not required to
provide public notice of a hearing under this section.
Added by Acts 1997, 75th Leg., ch. 1070, Sec. 2, eff. Sept. 1,
1997.
SUBCHAPTER C. ADMINISTRATIVE PROVISIONS
Sec. 49.051. Board of Directors.
A district shall be governed by its board, the number of which is
otherwise provided by law.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.052. Disqualification of Directors.
(a) A person is disqualified from serving as a member of a
board of a district that includes less than all the territory in
at least one county and which, if located within the corporate
area of a city or cities, includes within its boundaries less
than 75 percent of the incorporated area of the city or cities,
if that person:
(1) is related within the third degree of affinity or
consanguinity to a developer of property in the district, any
other member of the board, or the manager, engineer, attorney,
or other person providing professional services to the
district;
(2) is an employee of any developer of property in the
district or any director, manager, engineer, attorney, or other
person providing professional services to the district or a
developer of property in the district in connection with the
district or property located in the district;
(3) is a developer of property in the district;
(4) is serving as an attorney, consultant, engineer,
manager, architect, or in some other professional capacity for
the district or a developer of property in the district in
connection with the district or property located in the
district;
(5)(A) is a party to a contract with or along with the
district except for the purchase of public services furnished
by the district to the public generally; or
(B) is a party to a contract with or along with a
developer of property in the district relating to the
district or to property within the district, other than a
contract limited solely to the purpose of purchasing or
conveying real property in the district for the purpose of
either establishing a permanent residence, establishing a
commercial business within the district, or qualifying as a
director; or
(6) during the term of office, fails to maintain the
qualifications required by law to serve as a director.
(b) Within 60 days after the board determines a relationship or
employment exists which constitutes a disqualification under
Subsection (a), it shall replace the person serving as a member
of the board with a person who would not be disqualified.
(c) Any person who wilfully occupies an office as a member of a
board and exercises the powers and duties of that office when
disqualified under the provisions of Subsection (a) is guilty of
a misdemeanor and, on conviction, shall be fined not less than
$100 nor more than $1,000.
(d) As used in this section, "developer of property in the
district" means any person who owns land located within a
district covered under this section and who has divided or
proposes to divide the land into two or more parts for the
purpose of laying out any subdivision or any tract of land or any
addition to any town or city, or for laying out suburban lots or
building lots, or any lots, streets, alleys, or parks or other
portions intended for public use, or the use of purchasers or
owners of lots fronting thereon or adjacent thereto.
(e) Any rights obtained by any third party through official
action of a board covered by this section are not impaired or
affected by the disqualification under this section of any member
of the board to serve, provided that the third party had no
knowledge at the time the rights were obtained of the fact that
the member of the board was disqualified to serve.
(f) This section shall not apply to special water authorities,
districts described in Section 49.181(h)(4), or a district where
the principal function of the district is to provide irrigation
water to agricultural lands or to provide nonpotable water for
any purpose.
(g) A board by unanimous vote of its remaining members may
remove a board member only if that board member has missed
one-half or more of the regular meetings scheduled during the
prior 12 months. Any board member so removed may file a written
appeal with the commission within 30 days after receiving written
notice of the board action. The commission may reinstate a
removed director if the commission finds that the removal was
unwarranted under the circumstances, including the reasons for
absences, the time and place of the meetings missed, the business
conducted at the meetings missed, and any other facts or
circumstances the commission may deem relevant.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.053. Quorum.
A majority of the membership of the board constitutes a quorum
for any meeting, and a concurrence of a majority of the entire
membership of the board is sufficient for transacting any
business of the district. This section does not apply to special
water authorities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.054. Officers.
(a) After a district is created and the directors have
qualified, the board shall meet, elect a president,
vice-president, secretary, and any other officers or assistant
officers as the board may deem necessary, and begin the discharge
of its duties.
(b) After each directors election, the board shall meet and
elect officers.
(c) The president is the chief executive officer of the
district, presides at all meetings of the board, and shall
execute all documents on behalf of the district unless the board
by resolution authorizes the general manager or other employee of
the district to execute a document or documents on behalf of the
district. The vice-president shall act as president in case of
the absence or disability of the president. The secretary is
responsible for seeing that all records and books of the district
are properly kept and may attest the president's signature on
documents.
(d) The board may appoint another director, the general
manager, or any employee as assistant or deputy secretary to
assist the secretary, and any such person shall be entitled to
certify as to the authenticity of any record of the district,
including but not limited to all proceedings relating to bonds,
contracts, or indebtedness of the district.
(e) After any election or appointment of a director, a district
shall notify the executive director within 30 days after the date
of the election or appointment of the name and mailing address of
the director chosen and the date that director's term of office
expires. The executive director shall provide forms to the
district for such purpose.
(f) This section does not apply to special water authorities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1259, Sec. 1, eff.
Sept. 1, 1997.
Sec. 49.055. Sworn Statement, Bond, and Oath of Office.
(a) As soon as practicable after a director is elected or
appointed, that director shall make the sworn statement
prescribed by the constitution for public office.
(b) As soon as practicable after a director has made the sworn
statement, and before beginning to perform the duties of office,
that director shall take the oath of office prescribed by the
constitution for public officers.
(c) Before beginning to perform the duties of office, each
director shall execute a bond for $10,000 payable to the district
and conditioned on the faithful performance of that director's
duties. All bonds of the directors shall be approved by the
board and paid for by the district.
(d) The sworn statement, bond, and oath shall be filed with the
district and retained in its records. A duplicate original of
the sworn statement and the oath shall also be filed with the
secretary of state within 10 days after their execution and need
not be filed before the new director begins to perform the duties
of office.
(e) This section does not apply to special water authorities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.056. General Manager.
(a) The board may employ or contract with a person to perform
such services as general manager for the district as the board
may from time to time specify. The board may delegate to the
general manager full authority to manage and operate the affairs
of the district subject only to orders of the board.
(b) The board may delegate to the general manager the authority
to employ all persons necessary for the proper handling of the
business and operation of the district and to determine the
compensation to be paid all employees other than the general
manager.
(c) Except as provided by Section 49.052, a director may be
employed as general manager of the district, but the compensation
of a general manager who also serves as a director shall be
established by the other directors.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.057. Management of District.
(a) The board shall be responsible for the management of all
the affairs of the district. The district shall employ or
contract with all persons, firms, partnerships, corporations, or
other entities, public or private, deemed necessary by the board
for the conduct of the affairs of the district, including, but
not limited to, engineers, attorneys, financial advisors,
operators, bookkeepers, tax assessors and collectors, auditors,
and administrative staff.
(b) The board shall adopt an annual budget. All district
employees are employed at the will of the district unless the
district and employee execute a written employment contract.
(c) The board shall set the compensation and terms for
consultants.
(d) In selecting attorneys, engineers, auditors, financial
advisors, or other professional consultants, the district shall
follow the procedures provided in Subchapter A, Chapter 2254,
Government Code (Professional Services Procurement Act).
(e) The board shall require an officer, employee, or
consultant, including a bookkeeper, financial advisor, or system
operator, who routinely collects, pays, or handles any funds of
the district to furnish good and sufficient bond, payable to the
district, in an amount determined by the board to be sufficient
to safeguard the district. The board may require a consultant
who does not routinely collect, pay, or handle funds of the
district to furnish a bond. The bond shall be conditioned on the
faithful performance of that person's duties and on accounting
for all funds and property of the district. Such bond shall be
signed or endorsed by a surety company authorized to do business
in the state.
(f) The board may pay the premium on surety bonds required of
officials, employees, or consultants of the district out of any
available funds of the district, including proceeds from the sale
of bonds.
(g) The board may adopt bylaws to govern the affairs of the
district to perform its purposes. The board may by resolution
authorize its general manager or other employee to execute
documents on behalf of the district.
(h) The board shall also have the right to purchase all
materials, supplies, equipment, vehicles, and machinery needed by
the district to perform its purposes.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 3, eff.
Sept. 1, 1997.
Sec. 49.058. Conflicts of Interest.
A director of a district is subject to the provisions of
Chapter 171, Local Government Code, relating to the regulation of
conflicts of interest of officers of local governments.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.059. Disqualification of Tax Assessor and Collector.
(a) No person may serve as tax assessor and collector of a
district providing potable water or sewer utility services to
household users if that person:
(1) is related within the third degree of affinity or
consanguinity to any developer of property in the district, a
member of the board, or the manager, engineer, or attorney for
the district;
(2) is or was within two years immediately preceding the
assumption of assessment and collection duties with the
district an employee of any developer of property in the
district or any director, manager, engineer, or attorney for
the district;
(3) owns an interest in or is employed by any corporation
organized for the purpose of tax assessment and collection
services, a substantial portion of the stock of which is owned
by a developer of property within the district or any director,
manager, engineer, or attorney for the district; or
(4) is directly or through a corporation developing land in
the district or is a director, engineer, or attorney for the
district.
(b) Within 60 days after the board determines a relationship or
employment exists which constitutes a disqualification under
Subsection (a), it shall replace the person serving as tax
assessor and collector with a person who would not be
disqualified.
(c) Any person who wilfully violates the provisions of
Subsection (a) is guilty of a misdemeanor and on conviction shall
be fined not less than $100 nor more than $1,000.
(d) As used in this section, "developer of property in the
district" has the same meaning as in Section 49.052(d).
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.060. Fees of Office; Reimbursement.
(a) A director is entitled to receive fees of office of not
more than $100 a day for each day the director actually spends
performing the duties of a director. The fees of office may not
exceed $6,000 per annum except for directors of a special water
authority which is engaged in the distribution and sale of
electric energy to the public.
(b) Each director is also entitled to receive reimbursement of
actual expenses reasonably and necessarily incurred while
engaging in activities on behalf of the district.
(c) In order to receive fees of office and to receive
reimbursement for expenses, each director shall file with the
district a verified statement showing the number of days actually
spent in the service of the district and a general description of
the duties performed for each day of service.
(d) Instead of the fees of office and reimbursement of actual
expenses, a director may elect to receive a per diem of $100 for
each day the director actually spends performing the duties of a
director. The total per diems received may not exceed $6,000 per
annum except for directors of a special water authority that is
engaged in the distribution and sale of electric energy to the
public. In order to receive the per diem, each director shall
file with the district a general description of the duties
performed for each day of service.
(e) Section 49.002 notwithstanding, in all areas of conflict
the provisions of this section shall take precedence over all
prior statutory enactments. If the enactment of this section
results in an increase in the fees of office for any district,
that district's fees of office shall not increase unless the
board adopts a resolution authorizing payment of the higher fees.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 695, Sec. 1, eff.
Sept. 1, 1997.
Sec. 49.061. Seal.
The directors shall adopt a seal for the district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.062. Offices and Meeting Places.
(a) The board shall designate from time to time and maintain
one or more regular offices for conducting the business of the
district and maintaining the records of the district. Such
offices may be located either inside or outside the district's
boundaries as determined in the discretion of the board.
(b) The board shall designate one or more places inside or
outside the district for conducting the meetings of the board.
The meeting place may be a private residence or office, provided
that the board, in its order establishing the meeting place,
declares the same to be a public place and invites the public to
attend any meeting of the board. If the board establishes a
meeting place or places outside the district, it shall give
notice of the location or locations by filing a true copy of the
resolution establishing the location or locations of the meeting
place or places with the commission and also by publishing notice
of the location or locations in a newspaper of general
circulation in the district. If the location of any of the
meeting places outside the district is changed, notice of the
change shall be given in the same manner.
(c) After at least 25 qualified electors are residing in a
district, on written request of at least five of those electors,
the board shall designate a meeting place and hold meetings
within the district if it determines that the meeting place used
by the district deprives the residents of a reasonable
opportunity to attend district meetings. On the failure to
designate the location of the meeting place within the district,
five electors may petition the commission to designate a
location. If it determines that the meeting place used by the
district deprives the residents of a reasonable opportunity to
attend district meetings, the commission may designate a meeting
place inside or outside the district which is reasonably
available to the public and require that the meetings be held at
such place. After the next election, the board may designate
different meeting places, including one located outside the
boundaries of the district.
(d) Two or more districts may designate and share offices and
meeting places. This section does not apply to special water
authorities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.063. Notice of Meetings.
Notice of meetings of the board shall be given as set forth in
the open meetings law, Chapter 551, Government Code, except that
if a district does not have a meeting place within the district,
the district shall post notice of its meeting at a public place
within the district specified by the board in a written
resolution, rather than at its administrative office. The board
shall specify such public place to be a bulletin board or other
place within the district which is reasonably available to the
public. Neither failure to provide notice of a regular meeting
nor an insubstantial defect in notice of any meeting shall affect
the validity of any action taken at the meeting.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.064. Meetings.
The board shall hold such regular and special meetings as may
be necessary for the proper conduct of the district's business.
All meetings shall be conducted in accordance with the open
meetings law, Chapter 551, Government Code. A meeting of a
committee of the board, or a committee composed of
representatives of more than one board, where less than a quorum
of any one board is present is not subject to the provisions of
the open meetings law, Chapter 551, Government Code.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.065. Records.
(a) The board shall keep a complete account of all its meetings
and proceedings and shall preserve its minutes, contracts,
records, notices, accounts, receipts, and other records in a safe
place.
(b) The records of each district are the property of the
district and are subject to the open records law, Chapter 552,
Government Code.
(c) The preservation, microfilming, destruction, or other
disposition of the records of each district is subject to the
requirements of Chapter 201, Local Government Code, and rules
adopted under that chapter.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.066. Suits.
(a) A district may sue and be sued in the courts of this state
in the name of the district by and through its board. All courts
shall take judicial notice of the creation of the district and of
its boundaries.
(b) Any court in the state rendering judgment for debt against
a district may order the board to levy, assess, and collect taxes
or assessments to pay the judgment.
(c) The president or the general manager of any district shall
be the agent of the district on whom process, notice, or demand
required or permitted by law to be served upon the district may
be served.
(d) Except as provided in Subsection (e), no suit may be
instituted in any court of this state contesting:
(1) the validity of the creation and boundaries of a
district created under this code;
(2) any bonds or other obligations created under this code;
or
(3) the validity or the authorization of a contract with the
United States by the district.
(e) The matters listed in Subsection (d) may be judicially
inquired into at any time and determined in any suit brought by
the State of Texas through the attorney general. The action
shall be brought on good cause shown, except where otherwise
provided by other provisions of this code or by the Texas
Constitution. It is specifically provided, however, that no such
proceeding shall affect the validity of or security for any bonds
or other obligations theretofore issued by a district if such
bonds or other obligations have been approved by the attorney
general as provided by Section 49.184.
(f) A district or water supply corporation shall not be
required to give bond for appeal, injunction, or costs in any
suit to which it is a party and shall not be required to deposit
more than the amount of any award in any eminent domain
proceeding.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.067. Contracts.
A district shall contract, and be contracted with, in the name
of the district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.068. Contracts With Governmental Agencies.
The provisions of this chapter pertaining to bids and the Local
Government Code notwithstanding, a district may purchase property
from any governmental entity by negotiated contract without the
necessity of securing appraisals or advertising for bids.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.069. Employee Benefits.
(a) The board may provide for and administer retirement,
disability, and death compensation funds for the employees of the
district.
(b) The board may establish a public retirement system in
accordance with the provisions of Chapter 810, Government Code.
The board may also provide for a deferred compensation plan
described by Section 457 of the Internal Revenue Code of 1986 (26
U.S.C. Section 457).
(c) The board may include hospitalization and medical benefits
to its employees as part of the compensation paid to the officers
and employees and may adopt any plan, rule, or regulation in
connection with it and amend or change the plan, rule, or
regulation as it may determine.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.070. Workers' Compensation.
The board may become a subscriber under Title 5, Labor Code
(Texas Workers' Compensation Act), with any insurance company
authorized to write the policies in the State of Texas.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.071. District Name Change.
(a) On petition by a district showing reasonable grounds for a
name change, the commission by order may change the name of the
district to the name requested by the district. The new name
must be generally descriptive of the location of the district
followed by the type of district as provided by the title of the
chapter of the Water Code governing the district. If a district
is located wholly within one county that contains more than one
district of that type, the district may be differentiated, if
necessary, by adding to the new name the proper consecutive
number. The new name may not be the same as the name of any
other district in the county.
(b) A name change takes effect on the date of issuance of the
commission order making the name change.
(c) Not later than the 30th day after the date of issuance of
the commission order making the name change, the district shall
publish notice of the name change in a newspaper or newspapers of
general circulation in the county or counties in which the
district is located. Within that same period, the district shall
also give notice of the name change by mail to utility customers
or permittees, if any, and, to the extent practicable, to the
holders of bonds, obligations, and other indebtedness of the
district. Failure of the district to comply with this subsection
does not affect the validity of the name change.
(d) A change in the name of a district does not affect bonds,
obligations, or other indebtedness of the district existing
before the name change occurred.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.072. Director's Candidacy for Other Office: Ineligibility.
(a) A person serving as director of a district who becomes a
candidate for another office is no longer qualified to serve as
director.
(b) In this section, "candidate" has the meaning assigned by
Section 251.001, Election Code.
Added by Acts 1997, 75th Leg., ch. 1349, Sec. 75, eff. Sept. 1,
1997.
SUBCHAPTER D. ELECTION PROVISIONS
Sec. 49.101. General.
All elections shall be generally conducted in accordance with the
Election Code except as otherwise provided for by this code.
Write-in candidacies for any district office shall be governed by
Subchapter C, Chapter 146, Election Code.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.102. Confirmation and Director Election.
(a) Before issuing any bonds or other obligations, an election
shall be held within the boundaries of the proposed district to
determine if the proposed district shall be established and, if
the directors of the district are required by law to be elected,
to elect permanent directors.
(b) Notice of a confirmation or director election shall state
the day and place or places for holding the election, the
propositions to be voted on, and the number of directors to be
voted on.
(c) The ballots for a confirmation election shall be printed to
provide for voting "For District" and "Against District."
Ballots for a directors election shall provide the names of the
persons appointed by the governing body who qualified and are
serving as temporary directors at the time the election is
called. The ballots shall also have blank places after the names
of the temporary directors in which a voter may write the names
of other persons for directors.
(d) Immediately after the confirmation and director election,
the presiding judge shall take returns of the results to the
temporary board. The temporary board shall canvass the returns
and declare the results at the earliest practicable time.
(e) If a majority of the votes cast in the election favor the
creation of the district, then the temporary board shall declare
that the district is created and enter the result in its minutes.
If a majority of the votes cast in the election are against the
creation of the district, the temporary board shall declare that
the district was defeated and enter the result in its minutes. A
copy of the order shall be filed with the commission.
(f) The order canvassing the results of the confirmation
election shall contain a description of the district's boundaries
and shall be filed with the executive director and in the deed
records of the county or counties in which the district is
located.
(g) The temporary board shall also declare the persons
receiving the highest number of votes for directors to have been
elected as permanent directors.
(h) Unless otherwise agreed, the directors shall decide the
initial terms of office by lot, with a simple majority of
directors serving until the second succeeding directors election
and the remaining directors serving until the next directors
election.
(i) The provisions of this section shall not be applicable to
any district exercising the powers of Chapter 375, Local
Government Code, or any district created by a special Act of the
legislature that does not require a confirmation election.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.103. Terms of Office of Directors.
(a) Except as provided by Section 49.102, the members of the
board of a district shall serve for four-year terms.
(b) An election shall be held on the uniform election date,
established by the Election Code, in either January or May of
each even-numbered year to elect the appropriate number of
directors.
(c) The permanent directors may assign a position number to
each director's office, in which case directors shall thereafter
be elected by position and not at large.
(d) A district may provide for the election of all directors,
or a majority of directors, from single-member districts, which
shall be geographically described within the boundaries of the
district in a manner that is equitable for the electors within
such districts and within the district generally.
(e) Section 49.002 notwithstanding, in all areas of conflict
the provisions of Subsections (a) and (b) shall take precedence
over all prior statutory enactments.
(f) This section does not apply to:
(1) any special law district or authority that is not
required by the law creating the district or authority to elect
its directors by the public; or
(2) a special utility district operating under Chapter 65.
(g) A district may, if required under this section to change
the terms of office of directors to four-year terms or to change
the date on which the district holds a director election, extend
the terms of office of directors serving the district on the
effective date of H.B. No. 2236, Acts of the 75th Legislature,
Regular Session, 1997, to continue the terms until the next
appropriate election date in an even-numbered year. A district
that is required under this section to change the terms of office
of directors to staggered terms may require directors of the
district to draw lots to achieve staggered terms.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 4, eff.
Sept. 1, 1997.
Sec. 49.104. Alternative Election Procedures.
(a) Notwithstanding the provisions and requirements of the
Election Code and general laws, any two or more districts
situated in the same county and in which substantially all of the
land is being or has been developed as part of a single community
development plan and which are served by common water supply and
waste disposal systems may by mutual agreement designate a common
election office and common early and regular polling places
within one or more of the districts, but outside the boundaries
of one or more of the districts, for the conduct of director
election proceedings and early and regular balloting in director
elections. This alternative election procedure may only be used
if the common election office and polling places so designated:
(1) are within buildings open to the public;
(2) are within the boundaries of at least one of the
districts;
(3) meet the requirements of the Election Code and general
laws as polling places; and
(4) are located not more than five miles from any portion of
the boundaries of any of the participating districts.
(b) Such districts may also agree on and designate a common
election officer and common early and regular voting officials
for some or all of the director elections to be simultaneously
conducted at a common location, any of whom may be nonelective
employees of one or more of the districts, so long as the early
and regular voting officials are qualified voters within at least
one of the districts.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.105. Vacancies.
(a) Except as otherwise provided in this code, all vacancies on
the board and in other offices shall be filled for the unexpired
term by appointment of the board.
(b) If the number of directors is reduced to fewer than a
majority, the vacancies shall be filled by appointment by the
commission or the county commissioners court if the district was
created by the county commissioners court. An appointed director
shall serve for the unexpired term of the director he or she is
replacing.
(c) In the event of a failure to elect one or more members of
the board of a district resulting from the absence of, or failure
to vote by, the qualified voters in the district, the current
members of the board holding the positions not filled at such
election shall be deemed to have been reelected and shall serve
an additional term of office.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.106. Bond Elections.
(a) Before an election is held to authorize the issuance of
bonds, other than refunding bonds, there shall be filed in the
office of the district and open to inspection by the public an
engineer's report covering the land, improvements, facilities,
plants, equipment, and appliances to be purchased or constructed
and their estimated cost, together with maps, plats, profiles,
and data fully showing and explaining the report.
(b) Notice of a bond election shall contain the proposition or
propositions to be voted on, which includes the estimate of the
probable cost of design, construction, purchase, and acquisition
of improvements and additions thereto, and incidental expenses
connected with such improvements and the issuance of bonds.
(c) A bond election may be held on the same day as any other
district election. The bond election may be called by a separate
election order or as a part of any other election order. The
board may submit multiple purposes in a single proposition at an
election.
(d) A bond election may be called as a result of an agreement
to annex additional territory into the district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 5, eff.
Sept. 1, 1997.
Sec. 49.107. Operation and Maintenance Tax.
(a) A district may levy and collect a tax for operation and
maintenance purposes, including funds for planning, constructing,
acquiring, maintaining, repairing, and operating all necessary
land, plants, works, facilities, improvements, appliances, and
equipment of the district and for paying costs of proper
services, engineering and legal fees, and organization and
administrative expenses.
(b) An operation and maintenance tax may not be levied by a
district until it is approved by a majority of the electors
voting at an election held for that purpose. After such a tax
has been authorized by the district's voters, the board shall be
authorized to levy the tax and have it assessed and collected as
other district taxes.
(c) An operation and maintenance tax election may be held at
the same time and in conjunction with any other district
election. The election may be called by a separate election
order or as part of any other election order.
(d) The proposition in an operation and maintenance tax
election may be for a specific maximum rate or for an unlimited
rate.
(e) If a district has any surplus operation and maintenance tax
funds that are not needed for the purposes for which they were
collected, the funds may be used for any lawful purpose.
(f) Before a district reimburses a developer of property in the
district, as that term is defined in Section 49.052(d), or its
assigns, from operation and maintenance tax funds, for planning,
constructing, or acquiring facilities, the district shall obtain
approval by the executive director.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.108. Contract Elections.
(a) A contract may provide that the district will make payment
under the contract from proceeds from the sale of notes or bonds,
from taxes, or from any other income of the district or any
combination of these.
(b) A district may make payments under a contract from taxes
other than operation and maintenance taxes after the provisions
of the contract have been approved by a majority of the qualified
voters voting at an election held for that purpose. A contract
approved by the qualified voters of a district may contain a
provision stating that the contract may be modified or amended by
the board without voter approval.
(c) A contract election may be held at the same time and in
conjunction with any other district election. The election may
be called by a separate election order or as part of any other
election order.
(d) A contract approved by the voters will constitute an
obligation against the taxing power of the district to the extent
provided in the contract.
(e) A district that is required under Section 49.181 to obtain
approval by the commission of the district's issuance of bonds
must obtain approval by the executive director before the
district enters into an obligation under this section to collect
tax for debt that exceeds three years. This subsection does not
apply to contract taxes that are levied to pay for a district's
share of bonds that have been issued by another district and
approved by the commission.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 6, eff.
Sept. 1, 1997.
SUBCHAPTER E. FISCAL PROVISIONS
Sec. 49.151. Expenditures.
(a) Except as hereinafter provided, a district's money may be
disbursed only by check, draft, order, or other instrument that
shall be signed by at least a majority of the directors.
(b) The board may by resolution allow the general manager,
treasurer, bookkeeper, or other employee of the district to sign
disbursements.
(c) The board may by resolution allow disbursements to be
transferred by federal reserve wire system to accounts in the
name of the district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.152. Purposes for Borrowing Money.
The district may borrow money for any corporate purpose or
combination of corporate purposes only in compliance with the
methods and procedures specifically provided by this chapter or
by general law.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.153. Revenue Notes.
(a) The board, without the necessity of an election, may borrow
money on negotiable notes of the district to be paid solely from
the revenues derived from the ownership of all or any designated
part of the district's works, plants, improvements, facilities,
or equipment after deduction of the reasonable cost of
maintaining and operating the facilities.
(b) The notes may be first or subordinate lien notes within the
discretion of the board, but no obligation may ever be a charge
on the property of the district or on taxes levied or collected
by the district but shall be solely a charge on the revenues
pledged for the payment of the obligation. No part of the
obligation may ever be paid from taxes levied or collected by the
district.
(c) Except as provided by Subsection (e), a district may not
execute a note for a term longer than three years unless the
commission issues an order approving the note.
(d) This section does not apply to special water authorities.
(e) Subsection (c) does not apply to:
(1) a note issued to and approved by the:
(A) Farmers Home Administration;
(B) United States Department of Agriculture; or
(C) Texas Water Development Board; or
(2) a district described by Section 49.181(h).
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 7, eff.
Sept. 1, 1997.
Sec. 49.154. Bond Anticipation Notes; Tax Anticipation Notes.
(a) The board may declare an emergency in the matter of funds
not being available to pay principal of and interest on any bonds
of the district payable in whole or in part from taxes or to meet
any other needs of the district and may issue negotiable tax
anticipation notes or negotiable bond anticipation notes to
borrow the money needed by the district without advertising or
giving notice of the sale. Bond anticipation notes and tax
anticipation notes shall mature within one year of their date.
(b) Tax anticipation notes may be issued for any purpose for
which the district is authorized to levy taxes, and tax
anticipation notes shall be secured with the proceeds of taxes to
be levied by the district in the succeeding 12-month period. The
board may covenant with the purchasers of the notes that the
board will levy a sufficient tax to pay the principal of and
interest on the notes and pay the costs of collecting the taxes.
(c) Bond anticipation notes may be issued for any purpose for
which bonds of the district may have previously been voted or may
be issued for the purpose of refunding previously issued bond
anticipation notes. A district may covenant with the purchasers
of the bond anticipation notes that the district will use the
proceeds of sale of any bonds in the process of issuance for the
purpose of refunding the bond anticipation notes, in which case
the board will be required to use the proceeds received from sale
of the bonds in the process of issuance to pay principal,
interest, or redemption price on the bond anticipation notes.
(d) Districts required to seek commission approval of bonds
must have an application for such approval on file with the
commission prior to the issuance of bond anticipation notes.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.155. Repayment of Expenses.
(a) The district may pay all costs and expenses necessarily
incurred in the organization and operation of a district during
creation and construction periods including, but not limited to,
the following:
(1) organizational, administrative, and operating expenses;
(2) the cost of investigation and making plans;
(3) the cost of the engineer's report;
(4) legal fees; and
(5) any other incidental expenses.
(b) For purposes of this section, construction periods shall
mean any periods during which the district is constructing its
facilities or there is construction by third parties of above
ground improvements within the district, but in no event longer
than five years.
(c) The district may reimburse any person for money advanced
for the purposes in Subsection (a) and may be charged interest on
such funds.
(d) These payments may be made from money obtained from the
issuance of notes or the sale of bonds issued by the district or
out of maintenance taxes or other revenues of the district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.156. Depository.
(a) The board, by order or resolution, shall designate one or
more banks or savings associations within the state to serve as
the depository for the funds of the district. The board shall
not be required to advertise or solicit bids in selecting its
depositories.
(b) To the extent that funds in the depository banks or savings
associations are not insured by the Federal Deposit Insurance
Corporation, they shall be secured in the manner provided by law
for the security of funds by Chapter 2257, Government Code
(Public Funds Collateral Act).
(c) The board may authorize a designated representative to
supervise the substitution of securities pledged to secure the
district's funds.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.157. Investments.
(a) All district deposits and investments shall be governed by
Subchapter A, Chapter 2256, Government Code (Public Funds
Investment Act).
(b) The board may provide that an authorized representative of
the district may invest and reinvest the funds of the district
and provide for money to be withdrawn from the appropriate
accounts of the district for the investments on such terms as the
board considers advisable.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.158. Fiscal Year.
Within 30 days after a district becomes financially active, the
board shall adopt a fiscal year by a formal board resolution.
The district shall notify the executive director of the adopted
fiscal year within 30 days after adoption. The district may
change its fiscal year at any time; provided, however, it may not
be changed more than once in any 24-month period. After any
change in the district's fiscal year, the district shall notify
the executive director of the changed fiscal year within 30 days
after adoption.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
SUBCHAPTER F. ISSUANCE OF BONDS
Sec. 49.181. Authority of Commission Over Issuance of District Bonds.
(a) A district may not issue bonds unless the commission
determines that the project to be financed by the bonds is
feasible and issues an order approving the issuance of the bonds.
This section does not apply to refunding bonds or bonds issued to
and approved by the Farmers Home Administration, the United
States Department of Agriculture, or the Texas Water Development
Board.
(b) A district may submit to the commission a written application
for investigation of feasibility. An engineer's report
describing the project, including the data, profiles, maps,
plans, and specifications prepared in connection with the report,
must be submitted with the application.
(c) The executive director shall examine the application and the
report and shall inspect the project area. The district shall,
on request, supply the executive director with additional data
and information necessary for an investigation of the
application, the engineer's report, and the project.
(d) The executive director shall prepare a written report on the
project and include suggestions, if any, for changes or
improvements in the project. The executive director shall retain
a copy of the report and send a copy of the report to both the
commission and the district.
(e) The commission shall consider the application, the engineer's
report, the executive director's report, and any other evidence
allowed by commission rule to be considered in determining the
feasibility of the project.
(f) The commission shall determine whether the project to be
financed by the bonds is feasible and issue an order either
approving or disapproving, as appropriate, the issuance of the
bonds. The commission shall retain a copy of the order and send
a copy of the order to the district.
(g) Notwithstanding any provision of this code to the contrary,
the commission may approve the issuance of bonds of a district
without the submission of plans and specifications of the
improvements to be financed with the bonds. The commission may
condition the approval on any terms or conditions considered
appropriate by the commission.
(h) This section does not apply to a district if:
(1) the district's boundaries include one entire county;
(2) the district was created by a special Act of the legislature
and:
(A) the district is located entirely within one county;
(B) entirely within one or more home-rule municipalities;
(C) the total taxable value of the real property and improvements
to the real property zoned by one or more home-rule
municipalities for residential purposes and located within the
district does not exceed 25 percent of the total taxable value of
all taxable property in the district, as shown by the most recent
certified appraisal tax roll prepared by the appraisal district
for the county; and
(D) the district was not required by law to obtain commission
approval of its bonds before the effective date of this section;
(3) the district is a special water authority; or
(4) the district is governed by a board of directors appointed in
whole or in part by the governor, a state agency, or the
governing body or chief elected official of a municipality or
county and does not provide, or propose to provide, water, sewer,
drainage, reclamation, or flood control services to residential
retail or commercial customers as its principal function.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 8, eff.
Sept. 1, 1997.
Sec. 49.182. Commission Supervision of Projects and Improvements.
(a) During construction of projects and improvements approved
by the commission under this subchapter, no substantial
alterations may be made in the plans and specifications without
the approval of the commission in accordance with commission
rules.
(b) The executive director may inspect the improvements at any
time during construction to determine if the project is being
constructed in accordance with the plans and specifications
approved by the commission.
(c) If the executive director finds that the project is not
being constructed in accordance with the approved plans and
specifications, the executive director shall give written notice
immediately by certified mail to the district's manager and to
each board member.
(d) If within 10 days after the notice is mailed the board does
not take steps to ensure that the project is being constructed in
accordance with the approved plans and specifications, the
executive director shall give written notice of this fact to the
attorney general.
(e) After receiving this notice, the attorney general may bring
an action for injunctive relief or quo warranto proceedings
against the directors. Venue for either suit is exclusively in a
district court in Travis County.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.183. Bond Sales.
(a) Except for refunding bonds, or bonds sold to a state or
federal agency, bonds issued by a district shall be sold after
advertising for and receiving competitive sealed bids and shall
be awarded to the bidder whose bid produces the lowest net
effective interest rate to the district.
(b) Except for refunding bonds, or bonds sold to a state or
federal agency, after any bonds are finally approved and before
they are sold by a district, the board shall publish an
appropriate notice of the sale:
(1) at least one time not less than 10 days before the date
of sale in a newspaper of general circulation in the county or
counties in which the district is located; and
(2) at least one time in one or more recognized financial
publications of general circulation in the state as approved by
the state attorney general.
(c) If the district is issuing bonds and refunding bonds as one
issue and if the initial principal amount of refunding bonds is
50 percent or more of the total initial principal amount of bonds
being issued, for the purposes of this section, the issue shall
be considered to be refunding bonds and competitive bids shall
not be required.
(d) A district's bonds are negotiable instruments within the
meaning and purposes of the Business & Commerce Code. A
district's bonds may be issued and bear interest in accordance
with Chapter 503, Acts of the 54th Legislature, 1955 (Article
717k, Vernon's Texas Civil Statutes); Chapter 3, Acts of the 61st
Legislature, Regular Session, 1969 (Article 717k-2, Vernon's
Texas Civil Statutes); the Bond Procedures Act of 1981 (Article
717k-6, Vernon's Texas Civil Statutes); and Chapter 656, Acts of
the 68th Legislature, Regular Session, 1983 (Article 717q,
Vernon's Texas Civil Statutes). Except for this subsection, this
section does not apply to special water authorities or districts
described in Section 49.181(h)(4).
(e) Subsections (a) and (b) do not apply to district bonds
issued pursuant to Chapter 656, Acts of the 68th Legislature,
Regular Session, 1983 (Article 717q, Vernon's Texas Civil
Statutes).
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.184. Approval of Bonds by Attorney General; Registration of Bonds.
(a) Before bonds issued by a district are delivered to the
purchasers, a certified copy of all proceedings relating to
organization of the district for first bond issues and issuance
of the bonds and other relevant information shall be sent to the
attorney general.
(b) The attorney general shall carefully examine the bonds,
with regard to the record and the constitution and laws of this
state governing the issuance of bonds, and the attorney general
shall officially approve and certify the bonds if he or she finds
that they conform to the record and the constitution and laws of
this state and are valid and binding obligations of the district.
(c) After the attorney general approves and certifies the
bonds, the comptroller shall register them in a book kept for
that purpose and shall record the certificate of the attorney
general.
(d) After the approval and registration of the bonds by the
comptroller, they shall be incontestable in any court or other
forum, for any reason, and shall be valid and binding obligations
in accordance with their terms for all purposes.
(e) A contract or lease may be submitted to the attorney
general along with the bond records, and, if submitted, the
approval by the attorney general of the bonds shall constitute an
approval of the contract or lease and the contract or lease shall
be incontestable.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.185. Exemptions.
This subchapter shall not apply to districts engaged in the
distribution and sale of electric energy to the public.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.186. Authorized Investments; Security for Funds.
(a) All bonds, notes, and other obligations issued by a
district shall be legal and authorized investments for all banks,
trust companies, building and loan associations, savings and loan
associations, insurance companies of all kinds and types,
fiduciaries, and trustees, and for all interest and sinking funds
and other public funds of the state, and all agencies,
subdivisions, and instrumentalities of the state, including all
counties, cities, towns, villages, school districts, and all
other kinds and types of districts, public agencies, and bodies
politic.
(b) A district's bonds, notes, and other obligations are
eligible and lawful security for all deposits of public funds of
the state, and all agencies, subdivisions, and instrumentalities
of the state, including all counties, cities, towns, villages,
school districts, and all other kinds and types of districts,
public agencies, and bodies politic, to the extent of the market
value of the bonds, notes, and other obligations when accompanied
by any unmatured interest coupons attached to them.
Added by Acts 1997, 75th Leg., ch. 1070, Sec. 9, eff. Sept. 1,
1997.
SUBCHAPTER G. AUDIT OF DISTRICTS
Sec. 49.191. Duty to Audit.
(a) The board shall have the district's fiscal accounts and
records audited annually at the expense of the district.
(b) In all areas of conflict, the provisions of this subchapter
shall take precedence over all prior statutory enactments.
(c) The person who performs the audit shall be a certified public
accountant or public accountant holding a permit from the Texas
State Board of Public Accountancy.
(d) The audit required by this section shall be completed within
120 days after the close of the district's fiscal year.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.192. Form of Audit.
The executive director shall adopt accounting and auditing
manuals and, except as otherwise provided by the manuals, the
district audit shall be performed according to the generally
accepted auditing standards adopted by the American Institute of
Certified Public Accountants. Financial statements shall be
prepared in accordance with generally accepted accounting
principles as adopted by the American Institute of Certified
Public Accountants.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.193. Financial Reports.
The district's depository, the district's treasurer, and the
district's bookkeeper, if any, who receives or has control over
any district funds shall keep a full and itemized account of
district funds in its, his, or her possession. Such itemized
accounts and records shall be available for audit.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.194. Filing of Audits, Affidavits, and Financial Reports.
(a) After the board has approved the audit, it shall submit a
copy of the report to the executive director for filing within
135 days after the close of the district's fiscal year.
(b) If the board refuses to approve the annual audit report,
the board shall submit a copy of the report to the executive
director for filing within 135 days after the close of the
district's fiscal year, accompanied by a statement from the board
explaining the reasons for its failure to approve the report.
(c) Copies of the audit, the annual financial dormancy
affidavit, or annual financial report described in Sections
49.197 and 49.198 shall be filed annually in the office of the
district.
(d) Each district shall file with the executive director an
annual filing affidavit in a format prescribed by the executive
director, executed by a duly authorized representative of the
board, stating that all copies of the annual audit report, annual
financial dormancy affidavit, or annual financial report have
been filed under this section.
(e) The annual filing affidavit shall be submitted with the
applicable annual document when it is submitted to the executive
director for filing as prescribed by this subchapter.
(f) The executive director shall file with the attorney general
the names of any districts that do not comply with the provisions
of this subchapter.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.195. Review by Executive Director.
(a) The executive director may review the audit report of each
district.
(b) The commission may request that the state auditor assist in
the establishment of standards and procedures for review of
district audits by the executive director.
(c) If the executive director has any objections or determines
any violations of generally accepted auditing standards or
accounting principles, statutes, or board rules, or if the
executive director has any recommendations, he or she shall
notify the board and the district's auditor.
(d) Before the audit report may be accepted by the executive
director as being in compliance with the provisions of this
subchapter, the board and the auditor shall remedy objections and
correct violations of which they have been notified by the
executive director.
(e) If the audit report indicates that any penal law has been
violated, the executive director shall notify the appropriate
county or district attorney and the attorney general.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.196. Access to and Maintenance of District Records.
(a) The executive director shall have access to all vouchers,
receipts, district fiscal and financial records, and other
district records the executive director considers necessary.
(b) All district fiscal records shall be prepared on a timely
basis and maintained in an orderly manner in accordance with
generally accepted accounting principles. The fiscal records
shall be available for public inspection during regular business
hours. A district's fiscal records may be removed from the
district's office for the purposes of recording its fiscal
affairs and preparing an audit, during which time the fiscal
records are under the control of the district's auditor.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.197. Financially Dormant Districts.
(a) A financially dormant district is a district that had:
(1) $500 or less of receipts from operations, tax
assessments, loans, contributions, or any other sources during
the calendar year;
(2) $500 or less of disbursements of funds during the
calendar year;
(3) no bonds or other long-term (more than one year)
liabilities outstanding during the calendar year; and
(4) no cash or investments that exceeded $5,000 at any time
during the calendar year.
(b) A financially dormant district may elect to submit to the
executive director a financial dormancy affidavit instead of
complying with the audit requirements of Section 49.191.
(c) The annual financial dormancy affidavit shall be prepared
in a format prescribed by the executive director and shall be
submitted for filing by a duly authorized representative of the
district.
(d) The affidavit must be filed annually on or before January
31 with the executive director until such time as the district
becomes financially active and the board adopts a fiscal year;
thereafter, the district shall file annual audit reports as
prescribed by this subchapter.
(e) A district that becomes financially dormant after having
been financially active shall be required to file annual
financial dormancy affidavits on or before January 31, until the
district is either dissolved or again becomes financially active.
(f) Districts governed by this section are subject to periodic
audits by the executive director.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.198. Audit Report Exemption.
(a) A district may elect to file annual financial reports with
the executive director in lieu of the district's compliance with
Section 49.191 provided:
(1) the district had no bonds or other long-term (more than
one year) liabilities outstanding during the fiscal period;
(2) the district did not have gross receipts from
operations, loans, taxes, or contributions in excess of
$100,000 during the fiscal period; and
(3) the district's cash and temporary investments were not
in excess of $100,000 at any time during the fiscal period.
(b) The annual financial report must be accompanied by an
affidavit attesting to the accuracy and authenticity of the
financial report signed by a duly authorized representative of
the district.
(c) The annual financial report and affidavit in a format
prescribed by the executive director must be on file with the
executive director within 45 days after the close of the
district's fiscal year.
(d) Districts governed by this section are subject to periodic
audits by the executive director.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 10, eff.
Sept. 1, 1997.
Sec. 49.199. Policies and Audits of Districts.
(a) Subject to the law governing the district, the board shall
adopt the following in writing:
(1) a code of ethics for district directors, officers,
employees, and persons who are engaged in handling investments
for the district;
(2) a policy relating to travel expenditures;
(3) a policy relating to district investments that ensures
that:
(A) purchases and sales of investments are initiated by
authorized individuals, conform to investment objectives and
regulations, and are properly documented and approved; and
(B) periodic review is made of district investments to
evaluate investment performance and security;
(4) policies and procedures for selection, monitoring, or
review and evaluation of professional services;
(5) a uniform method of accounting and reporting for
industrial development bonds and pollution control bonds that
complies with requirements of the commission; and
(6) policies that ensure a better use of management
information including:
(A) budgets for use in planning and controlling cost;
(B) an audit committee of the board; and
(C) uniform reporting requirements that use "Audits of
State and Local Governmental Units" as a guide on audit
working papers and that use "Governmental Accounting and
Financial Reporting Standards."
(b) The state auditor may audit the financial transactions of
any district if the state auditor determines that the audit is
necessary.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.200. Review and Comment on Budget of Certain Districts.
A district that provides wholesale potable water and wastewater
services shall adopt a program that provides such wholesale
customers an opportunity to review and comment on the district's
annual budget that applies to their services before that budget
is adopted by the board.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
SUBCHAPTER H. POWERS AND DUTIES
Sec. 49.211. Powers.
(a) A district shall have the functions, powers, authority,
rights, and duties that will permit accomplishment of the
purposes for which it was created or the purposes authorized by
the constitution, this code, or any other law.
(b) A district is authorized to purchase, construct, acquire,
own, operate, maintain, repair, improve, or extend inside and
outside its boundaries any and all land, works, improvements,
facilities, plants, equipment, and appliances necessary to
accomplish the purposes of its creation or the purposes
authorized by this code or any other law.
(c) A district that is authorized by law to engage in drainage or
flood control activities may adopt:
(1) a master drainage plan, including rules relating to the plan
and design criteria for drainage channels, facilities, and flood
control improvements;
(2) rules for construction activity to be conducted within the
district that:
(A) reasonably relate to providing adequate drainage or flood
control; and
(B) use generally accepted engineering criteria; and
(3) reasonable procedures to enforce rules adopted by the
district under this subsection.
(d) If a district adopts a master drainage plan under Subsection
(c)(1), the district may adopt rules relating to review and
approval of proposed drainage plans submitted by property
developers. A district that reviews a proposed drainage plan
under rules adopted under this subsection shall, if the district
fails to approve the proposed plan, prepare a written report that
identifies the areas that are not in compliance with the
district's master drainage plan or rules adopted under Subsection
(c).
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 11, eff.
Sept. 1, 1997.
Sec. 49.212. Fees and Charges.
(a) A district may adopt and enforce all necessary charges,
fees, or rentals, in addition to taxes, for providing or making
available any district facility or service.
(b) A district may require a deposit for any services or
facilities furnished and the district may or may not provide that
the deposit will bear interest.
(c) Subject to observance of the procedure appropriate to the
circumstances, a district may discontinue any or all facilities
or services to prevent an abuse or to enforce payment of an
unpaid charge, fee, or rental due the district, including taxes
that have been delinquent for not less than six months.
(d) Notwithstanding any provision of law to the contrary, a
district that charges a fee that is an impact fee as described in
Section 395.001(4), Local Government Code, must comply with
Chapter 395, Local Government Code. A charge or fee by a
district for construction, installation, or inspection of a tap
or connection to district water, sanitary sewer, or drainage
facilities, including all necessary service lines and meters, or
for wholesale facilities that serve such water, sanitary sewer,
or drainage facilities that (i) does not exceed three times the
actual and reasonable costs to the district for such tap or
connection or (ii) if made to a nontaxable entity for retail or
wholesale service, does not exceed the actual costs to the
district for such work and for all facilities that are necessary
to provide district services to such entity and that are financed
or are to be financed in whole or in part by tax-supported or
revenue bonds of the district, shall not be deemed to be an
impact fee under Chapter 395, Local Government Code.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 12, eff.
Sept. 1, 1997.
Sec. 49.213. Authority to Issue Contracts.
(a) A district may contract with a person or any public or
private entity for the joint construction, financing, ownership,
and operation of any works, improvements, facilities, plants,
equipment, and appliances necessary to accomplish any purpose or
function permitted by a district, or a district may purchase an
interest in any project used for any purpose or function
permitted by a district.
(b) A district may enter into contracts with any person or any
public or private entity in the performance of any purpose or
function permitted by a district.
(c) A district may enter into contracts, which may be of
unlimited duration, with persons or any public or private
entities on the terms and conditions the board may consider
desirable, fair, and advantageous for:
(1) the purchase or sale of water;
(2) the collection, transportation, treatment, and disposal
of its domestic, industrial, and communal wastes or the
collection, transportation, treatment, and disposal of
domestic, industrial, and communal wastes of other persons;
(3) the gathering, diverting, and control of local storm
water, or other local harmful excesses of water;
(4) the continuing and orderly development of the land and
property within the district through the purchase,
construction, or installation of works, improvements,
facilities, plants, equipment, and appliances that the district
may otherwise be empowered and authorized to do or perform so
that, to the greatest extent reasonably possible, considering
sound engineering and economic practices, all of the land and
property may be placed in a position to ultimately receive the
services of the works, improvements, plants, facilities,
equipment, and appliances;
(5) the maintenance and operation of any works,
improvements, facilities, plants, equipment, and appliances of
the district or of another person or public or private entity;
(6) the collection, treatment, and disposal of municipal
solid wastes; and
(7) the exercise of any other rights, powers, and duties
granted to a district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.214. Conflicts of Interest in Contracts.
The provisions of Chapter 171, Local Government Code, shall
apply to the award of district contracts.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.215. Service to Areas Outside the District.
(a) A district may purchase, construct, acquire, own, operate,
repair, improve, or extend all works, improvements, facilities,
plants, equipment, and appliances necessary to provide any
services or facilities authorized to be provided by the district
to areas contiguous to or in the vicinity of the district
provided the district does not duplicate a service or facility of
another public entity. A district providing potable water and
sewer utility services to household users shall not provide
services or facilities to serve areas outside the district that
are also within the corporate limits of a city without securing a
resolution or ordinance of the city granting consent for the
district to serve the area within the city.
(b) To secure money for this purpose, a district is authorized
to issue and sell negotiable bonds and notes payable from the
levy and collection of ad valorem taxes on all taxable property
within the district or from all or any designated part of the
revenues received from the operation of the district's works,
improvements, facilities, plants, equipment, and appliances or
from a combination of taxes and revenues.
(c) Any bonds and notes may be issued upon the terms and
conditions set forth in this code.
(d) A district shall not be required to hold a certificate of
convenience and necessity as a precondition for providing retail
water or sewer service to any customer or service area,
notwithstanding the fact that such customer or service area may
be located either within or outside the boundaries of the
district or has previously received water or sewer service from
an entity required by law to hold a certificate of convenience
and necessity as a precondition for such service. This
subsection does not authorize a district to provide services
within an area for which a retail public utility holds a
certificate of convenience and necessity or within the boundaries
of another district without that district's consent, unless the
district has a valid certificate of convenience and necessity to
provide services to that area.
(e) A district is authorized to establish, maintain, revise,
charge, and collect the rates, fees, rentals, tolls, or other
charges for the use, services, and facilities that provide
service to areas outside the district that are considered
necessary and may be higher than those charged for comparable
service to users within the district.
(f) The rates, fees, rentals, tolls, or other charges shall be
at least sufficient to meet the expense of operating and
maintaining the services and facilities for a water and sanitary
sewer system serving areas outside the district and to pay the
principal of and interest and redemption price on bonds issued to
purchase, construct, acquire, own, operate, repair, improve, or
extend the services or facilities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.216. Enforcement by Peace Officers.
(a) A district may contract for or employ its own peace
officers with power to make arrests when necessary to prevent or
abate the commission of:
(1) any offense against the rules of the district when the
offense or threatened offense occurs on any land, water, or
easement owned or controlled by the district;
(2) any offense involving injury or detriment to any
property owned or controlled by the district; and
(3) any offense against the laws of the state.
(b) A district may appoint reserve peace officers who may be
called to serve as peace officers by the district during the
actual discharge of their official duties.
(c) A reserve peace officer serves at the discretion of the
district and may be called into service if the district considers
it necessary to have additional officers to preserve the peace in
or enforce the law of the district.
(d) A reserve peace officer on active duty and actively engaged
in assigned duties has the same rights, privileges, and duties as
any other peace officer of the district.
(e) Any peace officer, before beginning to perform any duties
and at the time of appointment, must take an oath and execute a
bond conditioned on faithful performance of such officer's duties
in the amount of $1,000 payable to the district. The oath and
the bond shall be filed in the district office.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.217. Operation of Certain Motor Vehicles On or Near Public
Facilities.
(a) In this section, "motor vehicle" means a self-propelled
device in, upon, or by which a person or property is or may be
transported or drawn on a road or highway.
(b) Except as provided in Subsections (c) and (d), a person may
not operate a motor vehicle on a levee, in a drainage ditch, or
on land adjacent to a levee, canal, ditch, exposed conduit,
pipeline, pumping plant, storm water facility, or other facility
for the transmission, storage, treatment, or distribution of
water, sewage, or storm water owned or controlled by a district.
(c) A district may authorize the use of motor vehicles on land
that it owns or controls by posting signs on the property.
(d) This section does not prohibit a person from:
(1) driving on a public road or highway; or
(2) operating a motor vehicle used for repair or maintenance
of public water, sewer, or storm water facilities.
(e) A person who operates a motor vehicle in violation of
Subsection (b) commits an offense. An offense under this section
is a Class C misdemeanor, except that if a person has been
convicted of an offense under this section, a subsequent offense
is a Class B misdemeanor.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.218. Acquisition of Property.
(a) A district or a water supply corporation may acquire land,
an interest in land, materials, waste grounds, easements,
rights-of-way, equipment, contract or permit rights or interests,
and other property, real or personal, considered necessary for
the purpose of accomplishing any one or more of the district's or
water supply corporation's purposes provided in this code or in
any other law.
(b) A district or water supply corporation shall have the right
to acquire property by gift, grant, or purchase, and the right to
acquire property shall include property considered necessary for
the construction, improvement, extension, enlargement, operation,
or maintenance of the plants, works, improvements, facilities,
equipment, or appliances of a district or a water supply
corporation.
(c) A district or water supply corporation may acquire either
the fee simple title to or an easement on all land, both public
and private, either inside or outside its boundaries and may
acquire the title to or an easement on property other than land
held in fee.
(d) A district or water supply corporation may also lease
property from others for its use on such terms and conditions as
the board of the district or the board of directors of the water
supply corporation may determine to be advantageous.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 13, eff.
Sept. 1, 1997.
Sec. 49.219. Acquisition of Existing Facilities.
Any district may acquire by agreement all or any part of
existing water, sanitary sewer, or drainage systems of any water
supply corporation, including works, improvements, facilities,
plants, equipment, appliances, contract rights, and other assets
and rights that are completed, partially completed, or under
construction, and in connection therewith a district may assume
all or any part of the contracts, indebtedness, or obligations of
the corporation related to said systems, including any contracts,
indebtedness, or obligations related to or payable from the
revenues of said systems, and may perform all or any part of the
obligations of said corporation in the same manner and to the
same extent that any other purchaser or assignee could be bound
on any such contracts, indebtedness, or obligations. Before
assuming any indebtedness or obligations of such corporation
related to any such system, a district other than a special water
authority shall obtain the approval of the commission of such
assumption.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.220. Right to Use Existing Rights-of-Way.
All districts or water supply corporations are given
rights-of-way within, along, under, and across all public, state,
county, city, town, or village roads, highways, and rights-of-way
and other public rights-of-way without the requirement for surety
bond or security; provided, however, that the entity having
jurisdiction over such roads, highways, and rights-of-way may
require indemnification. A district or water supply corporation
shall not proceed with any action to change, alter, or damage a
portion of the state highway system without having first obtained
the written consent of the Texas Department of Transportation,
and the placement of any facility of a district or water supply
corporation within state highway right-of-way shall be subject to
department regulation.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.221. Right to Enter Land.
(a) The directors, engineers, attorneys, agents, operators, and
employees of a district or water supply corporation may go on any
land to inspect, make surveys, or perform tests to determine the
condition, value, and usability of the property, with reference
to the proposed location of works, improvements, plants,
facilities, equipment, or appliances. The cost of restoration
shall be borne by the district or the water supply corporation.
(b) District employees and agents are entitled to enter any
public or private property within the boundaries of the district
or adjacent to any reservoir or other property owned by the
district at any reasonable time for the purpose of inspecting and
investigating conditions relating to the quality of water in the
state or the compliance with any rule, regulation, permit, or
other order of the district. District employees or agents acting
under this authority who enter private property shall observe the
establishment's rules and regulations concerning safety, internal
security, and fire protection and shall notify any occupant or
management of their presence and shall exhibit proper
credentials.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.222. Eminent Domain.
(a) A district or water supply corporation may acquire by
condemnation any land, easements, or other property inside or
outside the district boundaries, or the boundaries of the
certificated service area for a water supply corporation,
necessary for water, sanitary sewer, storm drainage, or flood
drainage or control purposes or for any other of its projects or
purposes, and may elect to condemn either the fee simple title or
a lesser property interest.
(b) The right of eminent domain shall be exercised in the
manner provided in Chapter 21, Property Code, except that a
district or a water supply corporation shall not be required to
give bond for appeal or bond for costs in any condemnation suit
or other suit to which it is a party and shall not be required to
deposit more than the amount of any award in any suit.
(c) The power of eminent domain may not be used for the
condemnation of land for the purpose of acquiring rights to
underground water or of water or water rights.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.223. Costs of Relocation of Property.
(a) In the event that the district or the water supply
corporation, in the exercise of the power of eminent domain or
power of relocation or any other power, makes necessary the
relocation, raising, lowering, rerouting, or change in grade of
or alteration in construction of any road, bridge, highway,
railroad, electric transmission line, telegraph, or telephone
properties, facilities, or pipelines, all necessary relocations,
raising, lowering, rerouting, or change in grade or alteration of
construction shall be done at the sole expense of the district or
the water supply corporation unless otherwise agreed to in
writing. Such relocation shall be accomplished in a timely
manner so that the project of the district or the water supply
corporation is not delayed.
(b) "Sole expense" means the actual cost of the relocation,
raising, lowering, rerouting, or change in grade or alteration of
construction and providing comparable replacement without
enhancing the facilities after deducting from it the net salvage
value derived from the old facility.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.224. Power to Condemn Cemeteries.
(a) The use of land for the construction of district dams and
creation of lakes and reservoirs for the purpose of conservation
and development of the natural resources of this state is hereby
declared to be superior to all other uses, and for these purposes
only a district has the power of eminent domain to acquire land,
improvements, and other property owned and held for cemeteries or
burial places necessary for the construction of a dam or that
lies inside the area to be covered by the lake or reservoir or
within 300 feet of the high water line of the lake or reservoir.
(b) Except as otherwise provided by this subchapter, the
procedure in condemnation proceedings is governed by Chapter 21,
Property Code.
(c) Notice shall be served on the title owner of the land on
which the cemetery is situated as provided in Chapter 21,
Property Code. General notice to persons having relatives
interred in the cemetery shall be given by publication for two
consecutive weeks in a newspaper circulated in the county in
which the cemetery is situated.
(d) The measure of damages in these eminent domain proceedings
shall be assessed as in other condemnation cases. An additional
amount of damages shall be assessed to cover the cost of removing
and reinterring the bodies interred in the cemetery or burial
place and the cost of removing and resetting the monuments or
markers erected at the graves.
(e) The additional assessment shall be deposited in the
registry of the county court and disbursed only for the purpose
of removing and reinterring the bodies in other cemeteries in
Texas agreed on between the district and the relatives of the
deceased persons.
(f) If in any case the district and the relatives of a deceased
person cannot agree within 30 days on a cemetery for reinterment,
or no relatives appear within that time, then the county judge
shall designate the cemetery for reinterment.
(g) Instead of depositing the additional assessment in the
registry of the court, the district may execute a bond sufficient
to cover costs of removing and reinterring the bodies. The bond
shall be payable to and approved by the county judge and
conditioned that the bodies will be removed and reinterred as
provided by this section.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.225. Leases.
A district may lease any of its property, real or personal, to
any person. The lease may contain the terms and provisions that
the board determines to be advantageous to the district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.226. Sale or Exchange of Surplus Land or Personal Property.
(a) Any personal property valued at more than $300 or any land
or interest in land owned by the district which is found by the
board to be surplus and is not needed by the district may be sold
under order of the board either by public or private sale, or the
land, interest in land, or personal property may be exchanged for
other land, interest in land, or personal property needed by the
district. Except as provided in Subsection (b), land, interest
in land, or personal property must be exchanged for like fair
market value, which value may be determined by the district.
(b) Any property dedicated to or acquired by the district
without expending district funds may be abandoned or released to
the original grantor, the grantor's heirs, assigns, executors, or
successors upon terms and conditions deemed necessary or
advantageous to the district and without receiving compensation
for such abandonment or release. District property may also be
abandoned, released, exchanged, or transferred to another
district, municipality, county, countywide agency, or authority
upon terms and conditions deemed necessary or advantageous to the
district. Narrow strips of property resulting from boundary or
surveying conflicts or similar causes, or from insubstantial
encroachments by abutting property owners, or property of larger
configuration that has been subject to encroachments by abutting
property owners for more than 25 years may be abandoned,
released, exchanged, or transferred to such abutting owners upon
terms and conditions deemed necessary or advantageous to the
district. Chapter 272, Local Government Code, shall not apply to
this subsection.
(c) Before either a public or a private sale of real property
not required by the district, the district shall give notice of
the intent to sell by publishing notice once a week for two
consecutive weeks in one or more newspapers with general
circulation in the district.
(d) If the district has outstanding bonds secured by a pledge
of tax revenues, the proceeds of the sale of property not
required by the district shall be applied to retire outstanding
bonds of the district when required by the district's applicable
bond resolutions.
(e) If the district does not have any outstanding bonds, the
proceeds derived from the sale of the personal property or land
not required by the district may be used for any lawful purpose.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 14, eff.
Sept. 1, 1997.
Sec. 49.2261. Purchase, Sale, or Other Exchange of Water or Water Rights.
Notwithstanding any other law, the district may:
(1) purchase, acquire, sell, transfer, lease, or otherwise
exchange water or water rights under an agreement between the
district and a person or entity that contains terms that are
considered advantageous to the district; and
(2) employ agents, consultants, brokers, professionals, or
other persons that the board determines are necessary or
appropriate to conduct a transaction described by Subdivision
(1).
Added by Acts 1997, 75th Leg., ch. 1070, Sec. 15, eff. Sept. 1,
1997.
Sec. 49.227. Authority to Act Jointly.
A district or water supply corporation may act jointly with any
other person or entity, private or public, whether within the
State of Texas or the United States, in the performance of any of
the powers and duties permitted by this code or any other laws.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.228. Damage to Property.
A person who wilfully destroys, defaces, damages, or interferes
with district or water supply corporation property is guilty of a
Class B misdemeanor.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.229. Grants and Gifts.
A district may accept grants, gratuities, advances, and loans
in any form from any source approved by the board, including any
governmental entity, any private or public corporation, and any
other person and may make and enter into contracts, agreements,
and covenants the board considers appropriate in connection with
acceptance of grants, gratuities, advances, and loans.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.230. Area-Wide Wastewater Treatment.
The powers and duties conferred on the district are granted
subject to the policy of the state to encourage the development
and use of integrated area-wide wastewater collection, treatment,
and disposal systems to serve the wastewater disposal needs of
the citizens of the state whenever economically feasible and
competitive to do so, it being an objective of the policy to
avoid the economic burden to the people and the impact on the
quality of the water in the state that result from the
construction and operation of numerous small wastewater
collection, treatment, and disposal facilities to serve an area
when an integrated area-wide wastewater collection, treatment,
and disposal system for the area can be reasonably provided.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.231. Standby Fees.
(a) In this section:
(1) "Standby fee" means a charge, other than a tax, imposed
on undeveloped property for the availability of potable water,
sanitary sewer, or drainage facilities and services.
(2) "Undeveloped property" means a tract, lot, or reserve in
the district to which no potable water, sanitary sewer, or
drainage connections have been made for which:
(A) water, sanitary sewer, or drainage facilities and
services are available;
(B) water supply, wastewater treatment plant capacity,
or drainage capacity sufficient to serve the property is
available; or
(C) major water supply lines, wastewater collection
lines, or drainage facilities with capacity sufficient to
serve the property are available.
(b) A district that proposes to provide or actually provides
retail potable water or sewer utility services, or drainage
services as the principal function of the district, may, with the
approval of the commission, adopt and impose on the owners of
undeveloped property in the district a standby fee in addition to
taxes levied by the district. A district may not impose a
standby fee for debt service purposes on undeveloped property
unless the facilities and services available to the property have
been financed by the district; however, a district may impose a
standby fee for operating and maintaining facilities that it has
not financed. The district may impose standby fees in different
amounts to fairly reflect the level and type of services and
facilities available to serve different property. The intent of
the standby fee is to distribute a fair portion of the cost
burden for operating and maintaining the facilities and for
financing capital costs of the facilities to owners of property
who have not constructed improvements but have potable water,
sewer, or drainage capacity available. Any revenues collected
from the standby fees shall be used to pay operation and
maintenance expenses, to pay debt service on the bonds, or both.
(c) If a district described in Subsection (b) desires to adopt
and impose a standby fee, the district shall submit to the
commission an application for authority to adopt and impose the
standby fee. The application must describe the tracts of
undeveloped property in the district and state the amount of the
proposed fee.
(d) The executive director shall examine an application
submitted under Subsection (c) and shall investigate the
financial condition of the district, including the district's
assets, liabilities, sources of revenue, level of utility service
rates, and level of debt service and maintenance tax rates. On
the request of the executive director, the district shall submit
any information the executive director considers relevant to the
examination and investigation. The executive director shall
prepare a written report on the application and the district's
financial condition, retain a copy of the report, and send a copy
of the report to the commission and the district.
(e) Notice of an application submitted under Subsection (c)
shall be published by the district in a form provided by the
commission. The district shall publish notice in a newspaper of
general circulation in the county or counties in which the
district is located once a week for two consecutive weeks. The
district shall also send notice of the application by certified
mail, return receipt requested, to each owner of undeveloped
property in the district. On the date the application is filed,
the district's tax assessor and collector shall certify to the
district the names of the persons owning undeveloped land in the
district as reflected by the most recent certified tax roll of
the district. Notice of the application must be sent by
certified mail, return receipt requested, to each mortgagee of
record that has submitted a written request to be informed of any
application for standby fees. The written request for notice
must include the name and address of the mortgagee, the name of
the property owner in the district, and a brief property
description. The commission may act on an application without
conducting a hearing if a public hearing is not requested by the
commission, the executive director, or an affected person in the
manner prescribed by commission rule during the 30 days following
publication of the notice or receipt of mail containing the
notice under this subsection.
(f) The commission shall consider the application, the report
of the executive director, and any other evidence allowed by
commission rule. The commission may approve the application only
if the commission finds that the fee is necessary to maintain the
financial integrity and stability of the district and fairly
allocates the costs of district facilities and services among
property owners of the district.
(g) The commission shall issue an order approving or
disapproving the application. The commission shall retain a copy
of the order and send a copy of the order to the district.
(h) The commission may approve the adoption and imposition of
the standby fee for a period of not more than three years. The
imposition of a standby fee may be renewed for additional periods
of not more than three years each in the same manner provided in
this section for initial approval of the standby fee.
(i) If approved by the commission, the board by resolution or
order may impose an annual standby fee on undeveloped land in the
district.
(j) The board may:
(1) charge interest, at the rate of one percent a month, on
a standby fee not paid in a timely manner in accordance with
the resolution or order imposing the standby fee; and
(2) refuse to provide potable water, sanitary sewer, or
drainage service to the property for which the fee was assessed
until all delinquent standby fees on the property and interest
on those fees are fully paid.
(k) A standby fee imposed under this section is a personal
obligation of the person owning the undeveloped property on
January 1 of the year for which the fee is assessed. A person is
not relieved of the obligation on transfer of title to the
property. On January 1 of each year, a lien attaches to
undeveloped property to secure payment of any standby fee imposed
under this section and the interest, if any, on the fee. The
lien has the same priority as a lien for taxes of the district.
(l) If a standby fee imposed under this section is not paid in
a timely manner, a district may file suit to foreclose the lien
securing payment of the fee and interest or to enforce the
personal obligation for the fee and interest, or both. The
district may recover, in addition to the fee and interest,
reasonable costs, including attorney's fees, incurred by the
district in enforcing the lien or obligation not to exceed 20
percent of the delinquent fee and interest. A suit authorized by
this subsection must be filed not later than the fourth
anniversary of the date the fee became due. A fee delinquent for
more than four years and interest on the fee are considered paid
unless a suit is filed before the expiration of the four-year
period.
(m) Chapter 395, Local Government Code, does not apply to a
standby fee imposed under this section.
(n) For purposes of title insurance policies issued under the
authority of Chapter 9, Insurance Code, standby fees are
considered taxes.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 16, eff.
Sept. 1, 1997.
Sec. 49.232. Laboratory and Environmental Services.
A district may contract with any person, within or without the
boundaries of the district, to provide or receive laboratory or
environmental services related to environmental, health, or
drinking water testing.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 17, eff.
Sept. 1, 1997.
SUBCHAPTER I. CONSTRUCTION, EQUIPMENT, MATERIALS, AND MACHINERY
CONTRACTS
Sec. 49.271. Contracts for Construction Work.
(a) Any contract made by the board for construction work shall
conform to the provisions of this chapter.
(b) The contract shall contain, incorporate by reference, or have
attached to it the specifications, plans, and details for work
included in the contract. All work shall be done in accordance
with these plans and specifications and any authorized change
orders under the supervision of the board or its designee.
(c) The district may adopt minimum criteria for the
qualifications of bidders on its construction contracts and for
sureties issuing payment and performance bonds. For contracts
over $25,000, the district shall require a person who bids to
submit a certified or cashier's check on a responsible bank in
the state equal to at least two percent of the total amount of
the bid, or a bid bond of at least two percent of the total
amount of the bid issued by a surety legally authorized to do
business in this state, as a good faith deposit to ensure
execution of the contract. If the successful bidder fails or
refuses to enter into a proper contract with the district, or
fails or refuses to furnish the bond required by law, the bidder
forfeits the deposit.
(d) The district may also require attendance by a principal of
each prospective bidder at mandatory pre-bid conferences and may
make any reasonable additional requirements regarding the taking
of bids the district may deem appropriate in order to obtain
competitive bids from responsible contractors and to minimize
contract disputes.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.272. Reports Furnished to Prospective Bidders.
The board shall furnish to any person who desires to bid on
construction work, and who makes a request in writing, a copy of
the engineer's report or plans and specifications showing the
details of the work to be done. The board may charge for each
copy of the engineer's report or plans and specifications an
amount sufficient to cover the cost of making the copy.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.273. Contract Award.
(a) The board shall contract for construction and repair and
renovation of district facilities and for the purchase of
equipment, materials, machinery, and all things that constitute
or will constitute the plant, works, facilities, or improvements
of the district in accordance with this section. The bidding
documents, plans, specifications, and other data needed to bid on
the project must be available at the time of the first
advertisement and the advertisement shall state the location at
which these documents may be reviewed.
(b) A contract may cover all the work to be provided for the
district or the various elements of the work may be segregated
for the purpose of receiving bids and awarding contracts. A
contract may provide that the work will be completed in stages
over a period of years.
(c) A contract may provide for the payment of a total sum that
is the completed cost of the work or may be based on bids to
cover cost of units of the various elements entering into the
work as estimated and approximately specified by the district's
engineers, or a contract may be let and awarded in any other form
or composite of forms and to any responsible person or persons
that, in the board's judgment, will be most advantageous to the
district and result in the best and most economical completion of
the district's proposed plants, improvements, facilities, works,
equipment, and appliances.
(d) For contracts for $25,000 or more, the board shall
advertise the letting of the contract, including the general
conditions, time, and place of opening of sealed bids. The
notice shall be published in one or more newspapers circulated in
each county in which part of the district is located. If one
newspaper meets both of these requirements, publication in such
newspaper is sufficient. If there are more than four counties in
the district, notice may be published in any newspaper with
general circulation in the district. The notice shall be
published once a week for three consecutive weeks before the date
that the bids are opened, and the first publication shall be not
later than the 21st day before the date of the opening of the
sealed bids.
(e) For contracts for $15,000 or more but less than $25,000,
the board shall solicit written competitive bids on uniform
written specifications from at least three bidders.
(f) For contracts of less than $15,000, the board is not
required to advertise or seek competitive bids.
(g) The board may not subdivide work to avoid the advertising
requirements specified in this section.
(h) The board may not accept bids that include substituted
items unless the substituted items were included in the original
bid proposal and all bidders had the opportunity to bid on the
substituted items or unless notice is given to all bidders at a
mandatory pre-bid conference.
(i) Change orders to contracts may be issued only as a result
of unanticipated conditions encountered during construction,
repair, or renovation or changes in regulatory criteria or to
facilitate project coordination with other political entities.
(j) The board is not required to advertise or seek competitive
bids for the repair of district facilities by the district's
operator if the cost of the repair is less than or equal to the
advertising requirements of this section.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 19, eff.
Sept. 1, 1997.
Sec. 49.274. Emergency Approval of District Projects.
If a district experiences an emergency condition that may
create a serious health hazard or unreasonable economic loss to
the district that requires immediate corrective action, the
district may negotiate limited duration contracts to make the
necessary repairs. The district shall submit to the executive
director details describing the specific serious health hazard or
unreasonable economic loss as soon as practicable following the
issuance of the contracts. Whenever possible, the district
should obtain prior approval of the executive director before
authorizing the contract, but failure to obtain prior approval
shall not void the contract. This section does not apply to
special water authorities.
added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.275. Contractor's.
Any person, firm, partnership, or corporation to whom a
contract is let must give good and sufficient performance and
payment bonds in accordance with Chapter 2253, Government Code,
and any minimum criteria for sureties issuing such bonds adopted
by a district in accordance with Section 49.271.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.276. Payment for Construction Work.
(a) The district shall pay the contract price of construction
contracts only as provided in this section.
(b) The district will make progress payments under construction
contracts monthly as the work proceeds, or at more frequent
intervals as determined by the board or its designee, on
estimates approved by the board or its designee.
(c) If requested by the district or district engineer, the
contractor shall furnish a breakdown of the total contract price
showing the amount included for each principal category of the
work, in such detail as requested, to provide a basis for
determining progress payments. In the preparation of estimates,
the district engineer may authorize material delivered on the
site and preparatory work done to be considered if the
consideration is specifically authorized by the contract and if
the contractor furnishes satisfactory evidence that he has
acquired title to the material and that it will be utilized on
the work covered by the contract.
(d) In making progress payments, 10 percent of the estimated
amount shall be retained until final completion and acceptance of
the contract work. However, if the board at any time after 50
percent of the work has been completed finds that satisfactory
progress is being made, it may authorize any of the remaining
progress payments to be made in full. Also, if the work is
substantially complete, the board, if it finds the amount
retained to be in excess of the amount adequate for the
protection of the district, at its discretion may release to the
contractor all or a portion of the excess amount. The district
is not obligated to pay interest on amounts retained except as
provided herein. The district shall not be obligated to pay any
interest on the 10 percent retainage held on the first 50 percent
of work completed. If the district holds any retainage on the
remaining 50 percent of the work completed, the district shall
pay interest on such retainage from the date the retainage is
withheld to the date of payment to the contractor. The interest
rate to be paid on such retainage shall be the rate of interest
paid by the district's depository bank on interest bearing
accounts of similar amounts during the period of time interest
accrues as provided herein.
(e) On completion and acceptance of each separate project,
public work, or other division of the contract, on which the
price is stated separately in the contract, payment may be made
without retention of a percentage.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.277. Inspection of and Reports on Construction Work.
(a) The board shall have control of construction work being
done for the district under contract to determine whether or not
the contract is being fulfilled and shall have the construction
work inspected by the district engineer or other designated
person.
(b) During the progress of the construction work, the district
engineer or other designated person shall submit to the board
detailed written reports showing whether or not the contractor is
complying with the contract, and when the work is completed the
district engineer shall submit to the board a final detailed
report including as-built plans of the facilities showing whether
or not the contractor has fully complied with the contract.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.278. Nonapplicability.
(a) This subchapter does not apply to:
(1) equipment, materials, or machinery purchased by the
district at an auction that is open to the public;
(2) contracts for personal or professional services or for a
utility service operator;
(3) contracts made by a district engaged in the distribution
and sale of electric energy to the public; or
(4) high technology procurements.
(b) Sections 252.021(a) and 252.042, Local Government Code,
apply to high technology procurements.
Added by Acts 1997, 75th Leg., ch. 1070, Sec. 20, eff. Sept. 1,
1997.
SUBCHAPTER J. ANNEXATION OR EXCLUSION OF LAND
Sec. 49.301. Adding Land by Petition of Landowner.
(a) In addition to any other provision provided by law, the owner
or owners of land whether or not contiguous to the district or
otherwise may file with the board a petition requesting that
there be included in the district the land described in the
petition by metes and bounds or by lot and block number if there
is a recorded plat of the area to be included in the district.
The petition may request the district to condition the annexation
on certain conditions, including the voter authorization of bonds
to serve the area to be annexed.
(b) If the district has bonds, notes, or other obligations
outstanding or bonds payable in whole or in part from taxes that
have been voted but are unissued, the board shall require the
petitioner or petitioners to assume their share of the
outstanding bonds, notes, or other obligations and the voted but
unissued tax bonds of the district and authorize the board to
levy a tax on their property in each year while any of the bonds,
notes, or other obligations payable in whole or in part from
taxation are outstanding to pay their share of the indebtedness.
(c) The petition of the landowner to add land to the district
shall be signed and executed in the manner provided by law for
the conveyance of real estate.
(d) The board shall hear and consider the petition and may add to
the district the land described in the petition if it is
feasible, practicable, and to the advantage of the district and
if the district's system and other improvements of the district
are sufficient or will be sufficient to supply the added land
without injuring land already in the district.
(e) If the district has bonds payable in whole or in part from
taxation that are voted but unissued at the time of an annexation
and the petitioners assume the bonds and authorize the district
to levy a tax on their property to pay the bonds, then the board
may issue the voted but unissued bonds even though the boundaries
of the district have been altered since the authorization of the
bonds.
(f) Granted petitions shall be filed for record and shall be
recorded in the office of the county clerk of the county or
counties in which the added land is located.
(g) An order issued by the board under this section is not
required to include all of the land described in the petition if
the board determines that a change in the description is
necessary or desirable.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 21, eff.
Sept. 1, 1997.
Sec. 49.302. Adding Land by Petition of Less Than All the Landowners.
(a) In addition to the method of adding land to a district
described in Section 49.301, defined areas of land, whether or
not they are contiguous to the district, may be annexed to the
district in the manner set forth in this section.
(b) A petition requesting the annexation of a defined area
signed by a majority in value of the owners of land in the
defined area, as shown by the tax rolls of the county or counties
in which such area is located, or signed by 50 landowners if the
number of landowners is more than 50, shall describe the land by
metes and bounds or by lot and block number if there is a
recorded plat of the area and shall be filed with the secretary
of the board.
(c) It shall be the duty of the board to pass an order fixing a
time and place at which the petition for annexation shall be
heard that shall not be less than 30 days from the day of the
order calling the hearing.
(d) The secretary of the board shall issue a notice setting
forth the time and place of the hearing and describing the area
proposed to be annexed. Notice of the hearing shall be given by
posting copies of the notice in three public places in the
district and in one public place in the area proposed to be
annexed for at least 14 days before the day of the hearing and by
publishing a copy of the notice in a newspaper of general
circulation in the county or counties in which the area proposed
to be annexed is located one time at least 14 days before the day
of the hearing.
(e) If upon the hearing of the petition it is found by the
board that the proposed annexation of the area to the district is
feasible, practicable, and to the advantage of the district and
if the district's system and other improvements of the district
are sufficient or will be sufficient to supply the added land
without injuring land already in the district, then the board, by
order entered in its minutes, may receive the proposed area as an
addition to and to become a part of the district. The order
adding the proposed territory to the district need not include
all of the land described in the petition if at the hearing a
modification or change is found necessary or desirable by the
board.
(f) A copy of the order annexing land to the district, attested
by the secretary of the board, shall be filed and recorded in the
deed records of the county or counties in which the district is
located if the land is finally annexed to the district.
(g) After the order is recorded the area shall be a component
part of the district.
(h) The annexed area shall bear its pro rata share of all
bonds, notes, or other obligations or taxes that may be owed,
contracted, or authorized by the district to which it has been
added.
(i) Before the added area shall be subject to all or any part
of the bonds, notes, obligations, or taxes created before the
annexation of the area to the district, the board shall order an
election to be held in the district, as enlarged by reason of the
annexation of the area, on the question of the assumption of the
bonds, notes, obligations, and taxes by the annexed area.
(j) At the same election, the board may also submit a
proposition on the question of whether the annexed area should
assume its part of the bonds of the district payable in whole or
in part from taxes that have been voted previously but not yet
issued or sold and the levy of an ad valorem tax on all taxable
property within the area annexed along with a tax on the rest of
the district for the payment of the bonds.
(k) If the election results favorably, the district shall be
authorized to issue its voted but unissued tax bonds even though
the boundaries of the district have been changed since the
original election approving the bonds.
(l) At the election called for the purpose of determining
whether the annexed area shall assume the bonds, notes, or other
obligations or taxes of the district, the board in a separate
proposition may also submit the question of whether the board
should be authorized to issue bonds payable in whole or in part
from taxes to provide service to the area annexed.
(m) In the event that the district has bonds, notes, or
obligations or taxes that may be owed, contracted, or authorized
at the time an area is annexed or if the district has voted but
unissued bonds payable in whole or in part from taxes at the time
of an annexation, the board may provide in its order annexing an
area to the district that the annexation will not be complete or
final unless the indebtedness, tax or bond, note, or other
obligation assumption election results favorably to the
assumption of the district's outstanding bonds, notes, or other
obligations and voted but unissued bonds.
(n) If the board elects to submit the question of whether the
board should be authorized to issue bonds to provide service to
the area annexed, the board may also provide in its order
annexing an area to the district that the annexation will not be
complete unless the election results favorably to the issuance of
bonds to serve the annexed area.
(o) Whenever an election is ordered to be held in the district
for the purpose of the assumption of bonds, notes, or other
obligations or taxes or the assumption of voted but unissued
bonds by reason of the annexation of any area, then the election
shall be held and notice given as provided for bond elections
held by the district.
(p) The district has the same right and duty to furnish service
to the annexed land that it previously had to furnish service to
other land in the district, and the board shall endeavor to serve
all land in the district without discrimination.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 22, eff.
Sept. 1, 1997.
Sec. 49.303. Excluding Land From District.
(a) Before a district orders an election for the authorization
of bonds payable in whole or in part from taxes, the board may,
on its own motion, call a hearing on the question of the
exclusion of land from the district under the provisions of this
section and Sections 49.304 through 49.307, if the exclusions are
practicable, just, or desirable.
(b) The board must call a hearing on the exclusion of land or
other property from the district on the written petition of any
landowner or property owner in the district filed with the
secretary of the board before the first election on the question
of whether bonds should be issued payable in whole or in part
from taxes is ordered.
(c) The board may hold a hearing on the exclusion of land or
other property from the district if the district has not issued
bonds payable in whole or in part from taxes, and if a landowner
or property owner submits a signed petition to the secretary of
the board evidencing the consent of the owners of a majority of
the acreage proposed to be excluded and a majority of the taxable
property in the district, as reflected by the most recent
certified tax roll of the district.
(d) A district that has previously held an election at which
approval was given for the issuance of bonds payable in whole or
in part from taxes may not rely on that election for the issuance
of the bonds if after the bond election, but before the bonds are
issued, land is excluded from the district as provided by this
subchapter. The board must call and hold another bond election
and receive voter approval as provided by this subchapter before
issuing those bonds.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.304. Hearing to Announce Proposed Exclusions and to Receive
Petitions.
(a) If the board determines that an exclusion hearing should be
held or if a written petition requesting an exclusion hearing is
filed with the secretary of the board as provided in Section
49.303, the board shall give notice of the time and place of a
hearing to announce its own conclusions relating to land or other
property to be excluded and to receive petitions for exclusion of
land or other property.
(b) The board shall publish notice of the hearing once a week
for two consecutive weeks in one or more newspapers with general
circulation in the district. The first publication shall appear
at least 14 days before the day of the hearing.
(c) The notice shall advise all interested property owners of
their right to present petitions for exclusions of land or other
property and to offer evidence in support of the petitions and
their right to contest any proposed exclusion based on either a
petition or the board's own conclusions and to offer evidence in
support of the contest.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.305. Petition.
(a) A petition for exclusion of land must accurately describe
by metes and bounds or lot and block number the land to be
excluded. A petition for exclusion of other property must
describe the property to be excluded.
(b) A petition for exclusion shall be filed with the district
at least seven days before the hearing and shall state clearly
the particular grounds on which the exclusion is sought. Only
the stated grounds shall be considered.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.306. Grounds for Exclusion.
Exclusions from the district may be made on the grounds that:
(1) to retain certain land or other property within the
district's taxing power would be arbitrary and unnecessary to
conserve the public welfare, would impair or destroy the value
of the property desired to be excluded, and would constitute
the arbitrary imposition of a confiscatory burden;
(2) to retain any given land or other property in the
district and to extend to it, either presently or in the
future, the benefits, service, or protection of the district's
facilities would create an undue and uneconomical burden on the
remainder of the district; or
(3) the land desired to be excluded cannot be bettered as to
conditions of living and health, provided with water or sewer
service, protected from flood, drained, freed from interruption
of traffic caused by excess of water on the roads, highways, or
other means of transportation serving the land, or otherwise
benefited by the district's proposed improvements.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.307. Hearing and Order Excluding Land.
(a) The board may adjourn the hearing from one day to another
and until all persons desiring to be heard are heard. The board
immediately shall specifically describe all property it proposes
to exclude on its own motion and shall hear first any protests
and evidence against exclusions proposed on the board's own
motion.
(b) After considering all engineering data and other evidence
presented to it, the board shall determine whether the facts
disclose the affirmative of the propositions stated in
Subdivision (1) or (2) or, if appropriate, in Subdivision (3) of
Section 49.306. If the affirmative exists, the board shall enter
an order excluding all land or other property falling within the
conditions defined by the respective subdivisions and shall
redefine in the order the boundaries of the district to embrace
all land not excluded. A copy of the order excluding land and
redefining the boundaries of the district shall be filed in the
deed records of the county or counties in which the district is
situated.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.308. Suit to Review Exclusion.
(a) Any person owning an interest in land affected by the order
may file a petition within 20 days after the effective date of
the order to review, set aside, modify, or suspend the order.
(b) The venue in any action shall be in any district court that
has jurisdiction in the county in which the district is located.
If the district includes land in more than one county, the venue
shall be in the district court having jurisdiction in the county
in which the major portion of the acreage of the land sought to
be excluded from the district is located.
(c) A person may appeal from the judgment or order of a
district court in a suit brought under the provisions of this
section to the court of civil appeals and supreme court as in
other civil cases in which the district court has original
jurisdiction. The appeal is subject to the statutes and rules of
practice and procedure in civil cases.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.309. Exclusion of Nonirrigated Property.
For the purposes of this section and Sections 49.310 through
49.314, the following definitions shall apply:
(1)(A) "Nonirrigated property" means land that:
(i) is not irrigable;
(ii) the owners of a majority of the acreage
of which no longer intend to irrigate; or
(iii) has been subdivided into:
(aa) town lots, or town lots and blocks,
or small parcels of the same general nature as town lots; or
(bb) town blocks and lots designed,
intended, or suitable for residential, commercial, or other
nonagricultural purposes, as distinguished from farm acreage
whether subdivided into a subdivision or not; and
(cc) including streets, alleys,
parkways, parks, and railroad property and rights-of-way located
in the subdivided land.
(B) The property described in Paragraph (A) shall be
considered nonirrigated property regardless of whether the
land is within or near a municipality and regardless of
whether a plat or map of the subdivision has been duly filed
for record and recorded in the office of the county clerk of
the county in which the land or any part of the land is
situated.
(C) The term does not include land that within the year
preceding the date of the hearing under Section 49.310 was
used for farming or agricultural purposes.
(2) "District" means a water control and improvement, water
improvement, or irrigation district the principal purpose of
which is furnishing water for the irrigation of agricultural
lands or that is principally engaged in furnishing water for
the irrigation of agricultural lands.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.310. Authority to Exclude Land.
(a) A petition for exclusion may be filed by the owner or
owners, or their authorized agent, of a majority in acreage of
nonirrigated property included within the boundaries of a
district.
(b) Upon receipt of a petition for exclusion, or upon its own
motion, a district shall issue an order excluding the property
if, after notice and hearing, the board finds that:
(1) the described property is nonirrigated property;
(2) the applicable requirements of Section 49.311 have been
satisfied;
(3) the owner or owners do not object to the exclusion of
their nonirrigated property; and
(4) it is in the best interest of the district and of the
described property to exclude that property from the district.
(c) The district shall follow the notice and hearing provisions
and other procedural requirements for excluding territory
applicable to that district as set out in Sections 49.303 through
49.307.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.311. Consent From Holders of Indebtedness.
If the district has outstanding bonded indebtedness, or
indebtedness under a loan from a governmental agency, a written
consent from an authorized representative of the holder or
holders of the indebtedness consenting to the exclusion shall be
obtained and filed with the district before the hearing.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.312. Results of Exclusion.
(a) Upon issuance of an order excluding property, that property
is no longer a part of the district and is not entitled to water
service from the district.
(b) Any taxes, assessments, or other charges owed to the
district at the time of exclusion remain the obligation of the
owner of the excluded property and continue to be secured by
statutory liens on the property, if any.
(c) Once excluded, the landowner has no further liability to
the district for future taxes, assessments, or other charges of
the district.
(d) A copy of the order excluding the property from the
district certified and acknowledged by the secretary of the board
shall be recorded by the district in the real property records of
the county in which the excluded property is located as evidence
of the exclusion.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.313. District Facilities on Excluded Property.
If any canals, ditches, pipelines, pumps, or other facilities
of the district are located on lands excluded by the resolution
of the board, the exclusion does not affect or interfere with any
rights that the district has to maintain and continue operation
of the facilities as located for the purpose of servicing lands
remaining in the district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.314. Water Allocations.
(a) After the district adopts an order excluding nonirrigated
property, a city or other water supply corporation that serves
the excluded land with a potable water supply may petition the
district to apply to the commission to convert the proportionate
irrigation water allocation of the land excluded as nonirrigated
property, as determined by the district, from irrigation use to
municipal use allocation.
(b) The district shall make such application to the commission
within 30 days of the filing of a petition by the city or water
supply corporation that serves the land with a potable water
supply, provided the city or other water supply corporation pays
the district the amount the district estimates will be its
reasonable expenses and attorney's fees incurred in the
commission conversion proceedings and enters into an agreement
with the district setting forth the basis on which the water
allocation shall be delivered, or made available, to the city or
water supply corporation covering such terms as the entities may
agree to, and in the event the parties cannot agree, such dispute
shall not be subject to the jurisdiction of the commission, or
its successors, under this code but subject to resolution through
alternative dispute resolution. In such commission proceeding,
the city or water supply corporation shall provide evidence to
the commission of the current or projected need within a five
year period for the municipal-use water allocation after such
conversion as a condition of such conversion of use of the
district's water rights from irrigation use to municipal use.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
SUBCHAPTER K. DISSOLUTION
Sec. 49.321. Dissolution Authority.
After notice and hearing, the commission may dissolve any
district that is inactive for a period of five consecutive years
and has no outstanding bonded indebtedness.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.322. Notice of Hearing.
(a) The commission shall give notice of the dissolution hearing
that briefly describes the reasons for the proceeding.
(b) The notice shall be published once each week for two
consecutive weeks before the day of hearing in a newspaper having
general circulation in the county or counties in which the
district is located. The first publication shall be 30 days
before the day of the hearing.
(c) The commission shall give notice of the hearing by first
class mail addressed to the directors of the district according
to the last record on file with the executive director.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.323. Investigation.
The executive director shall investigate the facts and
circumstances of the district to be dissolved and the result of
the investigation shall be included in a written report.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.324. Order of Dissolution.
The commission may enter an order dissolving the district at
the conclusion of the hearing if it finds that the district has
performed none of the functions for which it was created for a
period of five consecutive years before the day of the proceeding
and that the district has no outstanding bonded indebtedness.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.325. Certified Copy of Order.
The commission shall file a certified copy of the order of
dissolution of the district in the deed records of the county or
counties in which the district is located. If the particular
district was created by a special Act of the legislature, the
commission shall file a certified copy of the order of
dissolution with the secretary of state.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.326. Appeals.
(a) Appeals from a commission order dissolving a district shall
be filed and heard in the district court of any of the counties
in which the land is located.
(b) The trial on appeal shall be de novo and the substantial
evidence rule shall not apply.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.327. Assets Escheat to State.
Upon the dissolution of a district by the commission, all
assets of the district shall escheat to the State of Texas. The
assets shall be administered by the comptroller and shall be
disposed of in the manner provided by Chapter 74, Property Code.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 20.11,
eff. Sept. 1, 1997.
SUBCHAPTER L. FIRE DEPARTMENTS
Sec. 49.351. Fire Departments.
(a) A district providing potable water or sewer service to
household users may establish, operate, and maintain a fire
department to perform all fire-fighting activities within the
district as provided in this subchapter and may issue, with voter
approval, bonds for financing the establishment of the fire
department including the construction and purchase of necessary
buildings, facilities, and equipment and the provision of an
adequate water supply.
(b) After approval of the district electors of a plan to operate
or jointly operate a fire department, the district or districts
shall provide an adequate system and water supply for
fire-fighting purposes, may construct and purchase necessary
buildings, facilities, and equipment, and may employ all
necessary personnel including supervisory personnel to operate
the fire department.
(c) Bonds issued for establishment of the fire department shall
be authorized and issued, and a district shall be authorized to
levy a tax to pay the principal of and interest on such bonds, as
provided by law for authorization and issuance of other bonds of
the district.
(d) Two or more districts may contract to operate a joint fire
department for their districts and shall include in the contract
a system for joint administration and operation of the fire
department, the extent of services to be provided, a method for
funding the department from funds of each district, and any other
terms and conditions the parties consider necessary.
(e) A district may contract with any other person to perform
fire-fighting services within the district.
(f) Before a district establishes a fire department, contracts to
operate a joint fire department, or contracts with another person
to perform fire-fighting services within the district, the
district must comply with the provisions of Subsections (g), (h),
and (i).
(g) A district or districts proposing to act jointly shall
develop a detailed plan for the establishment, operation, and
maintenance of the proposed department, including a detailed
presentation of all financial requirements. If a district is
entering into a contract under Subsection (e), the district shall
develop a plan that describes in detail the facilities and
equipment to be devoted to service to the district and all
proposals for providing the service and that includes a
presentation of the financial requirements under the contract.
Before adoption of a plan and any contract by the district, the
board shall hold a hearing at which any person residing in the
district may present testimony for and against the proposed plan
and any proposed contract. Notice of the hearing and the place
at which the plan and any contract may be examined shall be
posted in two public places within the district at least 10 days
before the date of the hearing.
(h) After adoption of the plan and any contract by the board, the
plan and financial presentation, together with any contract and a
written report in a form prescribed by the executive director
describing existing fire departments and fire-fighting services
available within 25 miles of the boundaries of the district,
shall be submitted to the executive director for consideration by
the commission under rules adopted by the commission. Before
approval or disapproval, the commission shall hold a hearing.
Notice of the hearing before the commission shall be posted by
the board in at least two public places in the district at least
five days before the hearing. Before the commission approves the
application, it must find that it is economically feasible for
the district to implement the plan and meet the provisions of any
contract and shall take into consideration in giving its approval
the general financial condition of the district and the economic
feasibility of the district carrying out the plan or meeting the
obligations of the contract.
(i) After approval by the commission, the district shall submit
to the electors of the district at the election to approve bonds
for financing the plan, or if no bonds are to be approved, at an
election called for approval of the plan, the proposition of
whether or not the plan should be implemented or entered into by
the district. The ballots at the election shall be printed, as
applicable, to provide for voting for or against the proposition:
"The implementation of the plan for (operation/joint operation)
of a fire department"; or "The plan and contract to provide
fire-fighting services for the district."
(j) No funds of the district may be used to establish a fire
department, to enter into joint operation of a fire department,
or to contract for fire-fighting services without the approval of
a plan by the electors as provided in this section. However, the
district may use available funds for preparation of a plan and
any contract. The operation of a fire department or provision of
fire-fighting services is an essential public necessity, and a
district may discontinue any and all services, including water
and sewer service, to any person who fails to timely pay fire
department service fees or any other assessment adopted by the
district to support the fire department or the provision of
fire-fighting services.
(k) In this section, "fire-fighting activities" means all of the
customary and usual activities of a fire department, including
fire suppression, fire prevention, training, safety education,
maintenance, communications, medical emergency services,
photography, and administration.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 23, eff.
Sept. 1, 1997.
Sec. 49.352. Municipal System in Unserved Area.
(a) This section applies only to a home-rule municipality that:
(1) is located in a county with a population of more than
1.75 million that is adjacent to a county with a population of
more than 1 million; and
(2) has within its boundaries a part of a district.
(b) If a district does not establish a fire department under
this subchapter, a municipality that contains a part of the
district inside its boundaries may by ordinance or resolution
provide that a water system be constructed or extended into the
area that is in both the municipality and the district for the
delivery of potable water for fire flow that is sufficient to
support the placement of fire hydrants and the connection of the
water system to fire suppression equipment.
(c) For purposes of this section, a municipality may obtain
single certification in the manner provided by Section 13.255,
except that the municipality may file an application with the
commission to grant single certification immediately after the
municipality provides notice of intent to provide service as
required by Section 13.255(b).
Added by Acts 1997, 75th Leg., ch. 1010, Sec. 6.33, eff. Sept. 1,
1997.
SUBCHAPTER M. NOTICES, REPORTS, AND BANKRUPTCY
Sec. 49.451. Posting Signs in the District.
(a) A district subject to the notice requirements of Section
49.452 shall, within 30 days after the effective date of this
section or the creation of the district, post signs indicating
the existence of the district at two principal entrances to the
district.
(b) The size and exact location of the information contained on
the signs shall be determined by the executive director.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.452. Notice to Purchasers.
(a)(1) Any person who proposes to sell or convey real property
located in a district created under this title or by a special
Act of the legislature that is providing or proposing to provide,
as the district's principal function, water, sanitary sewer,
drainage, and flood control or protection facilities or services,
or any of these facilities or services that have been financed or
are proposed to be financed with bonds of the district payable in
whole or part from taxes of the district, or by imposition of a
standby fee, if any, to household or commercial users, other than
agricultural, irrigation, or industrial users, and which district
includes less than all the territory in at least one county and
which, if located within the corporate area of a city, includes
less than 75 percent of the incorporated area of the city or
which is located outside the corporate area of a city in whole or
in substantial part, must first give to the purchaser the written
notice provided in this section.
(2) The provisions of this section shall not be applicable
to:
(A) transfers of title under any type of lien
foreclosure;
(B) transfers of title by deed in cancellation of
indebtedness secured by a lien upon the property conveyed;
or
(C) transfers of title by reason of a will or probate
proceedings.
(b) The prescribed notice for all districts shall be executed
by the seller and shall read as follows:
"The real property, described below, that you are about to
purchase is located in the ___________________ District. The
district has taxing authority separate from any other taxing
authority and may, subject to voter approval, issue an unlimited
amount of bonds and levy an unlimited rate of tax in payment of
such bonds. As of this date, the rate of taxes levied by the
district on real property located in the district is $__________
on each $100 of assessed valuation. If the district has not yet
levied taxes, the most recent projected rate of debt service tax,
as of this date, is $__________ on each $100 of assessed
valuation. The total amount of bonds approved by the voters and
which have been or may, at this date, be issued is $__________,
and the aggregate initial principal amounts of all bonds issued
for one or more of the specified facilities of the district and
payable in whole or in part from property taxes is $__________.
"The district has the authority to adopt and impose a standby
fee on property in the district that has water, sanitary sewer,
or drainage facilities and services available but not connected
and which does not have a house, building, or other improvement
located thereon and does not substantially utilize the utility
capacity available to the property. The district may exercise
the authority without holding an election on the matter. As of
this date, the most recent amount of the standby fee is
$__________. An unpaid standby fee is a personal obligation of
the person that owned the property at the time of imposition and
is secured by a lien on the property. Any person may request a
certificate from the district stating the amount, if any, of
unpaid standby fees on a tract of property in the district.
"The purpose of this district is to provide water, sewer,
drainage, or flood control facilities and services within the
district through the issuance of bonds payable in whole or in
part from property taxes. The cost of these utility facilities
is not included in the purchase price of your property, and these
utility facilities are owned or to be owned by the district. The
legal description of the property you are acquiring is as
follows:
______________________ (Date)
Signature of Seller
PURCHASER IS ADVISED THAT THE INFORMATION SHOWN ON THIS FORM IS
SUBJECT TO CHANGE BY THE DISTRICT AT ANY TIME. THE DISTRICT
ROUTINELY ESTABLISHES TAX RATES DURING THE MONTHS OF SEPTEMBER
THROUGH DECEMBER OF EACH YEAR, EFFECTIVE FOR THE YEAR IN WHICH
THE TAX RATES ARE APPROVED BY THE DISTRICT. PURCHASER IS ADVISED
TO CONTACT THE DISTRICT TO DETERMINE THE STATUS OF ANY CURRENT OR
PROPOSED CHANGES TO THE INFORMATION SHOWN ON THIS FORM.
"The undersigned purchaser hereby acknowledges receipt of the
foregoing notice at or prior to execution of a binding contract
for the purchase of the real property described in such notice or
at closing of purchase of the real property.
______________________ (Date)
Signature of Purchaser
"(Note: Correct district name, tax rate, bond amounts, and
legal description are to be placed in the appropriate space.)
Except for notices included as an addendum or paragraph of a
purchase contract, the notice shall be executed by the seller and
purchaser, as indicated. If the district does not propose to
provide one or more of the specified facilities and services, the
appropriate purpose may be eliminated. If the district has not
yet levied taxes, a statement of the district's most recent
projected rate of debt service tax is to be placed in the
appropriate space. If the district does not have approval from
the commission to adopt and impose a standby fee, the second
paragraph of the notice may be deleted. For the purposes of the
notice form required to be given to the prospective purchaser
prior to execution of a binding contract of sale and purchase, a
seller and any agent, representative, or person acting on the
seller's behalf may modify the notice by substitution of the
words "January 1, ______' for the words "this date' and place the
correct calendar year in the appropriate space."
(c) The notice required by this section shall be given to the
prospective purchaser prior to execution of a binding contract of
sale and purchase either separately or as an addendum or
paragraph of a purchase contract. In the event a contract of
purchase and sale is entered into without the seller providing
the notice required by this subsection, the purchaser shall be
entitled to terminate the contract. If, however, the seller
furnishes the required notice at or prior to closing the purchase
and sale contract and the purchaser elects to close even though
such notice was not timely furnished prior to execution of the
contract, it shall be conclusively presumed that the purchaser
has waived all rights to terminate the contract and recover
damages or other remedies or rights under the provisions of this
section. Notwithstanding any provision of this subchapter to the
contrary, all sellers, title companies, and examining attorneys,
and any agent, representative, or person acting on their behalf,
shall not be liable for damages under the provisions of either
Subsection (l) or (m) or liable for any other damages to any
person for failure to provide the notice required by this section
to a purchaser prior to execution of a binding contract of a
purchase and sale when the district has not filed the information
form and map or plat as required under Section 49.455.
(d) The purchaser shall sign the notice or purchase contract
including such notice to evidence the receipt of notice.
(e) At the closing of purchase and sale, a separate copy of
such notice with current information shall be executed by the
seller and purchaser, acknowledged, and thereafter recorded in
the deed records of the county in which the property is located.
For the purposes of this section, all sellers, title companies,
and examining attorneys, and any agent, representative, or person
acting on their behalf, shall be entitled to rely on the accuracy
of the information form and map or plat as last filed by each
district under Section 49.455 or the information contained in or
shown on the notice form issued by the district under Section
49.453 in completing the notice form to be executed by the seller
and purchaser at the closing of purchase and sale. Any
information taken from the information form or map or plat as
last filed by each district and the information contained in or
shown on the notice form issued by the district under Section
49.453 shall be, for purposes of this section, conclusively
presumed as a matter of law to be correct. All subsequent
sellers, purchasers, title insurance companies, examining
attorneys, and lienholders shall be entitled to rely upon the
information form and map or plat filed by the district or the
notice form issued by the district under Section 49.453.
(f) For the purposes of this section, an executory contract of
purchase and sale having a performance period of more than six
months shall be considered a sale under Subsection (a).
(g) For the purposes of the notice form to be given to the
prospective purchaser prior to execution of a binding contract of
sale and purchase, a seller and any agent, representative, or
person acting in the seller's behalf may modify the notice by
substitution of the words "January 1, ____" for the words "this
date" and place the correct calendar year in the appropriate
space. All sellers, and all persons completing the prescribed
notice in the sellers' behalf, shall be entitled to rely on the
information contained in or shown on the information form and map
or plat filed of record by the district under Section 49.455 in
completing the prescribed form to be given to the prospective
purchaser prior to execution of a binding contract of sale and
purchase. Except as otherwise provided in Subsection (e), any
information taken from the information form or map or plat filed
of record by the district in effect as of January 1 of each year
shall be, for purposes of the notice to be given to the
prospective purchaser prior to execution of a binding contract of
sale and purchase, conclusively presumed as a matter of law to be
correct for the period January 1 through December 31 of such
calendar year. A seller and any persons completing the
prescribed notice in the seller's behalf may provide more recent
information, if available, than the information contained in or
shown on the information form and map or plat filed of record by
the district under Section 49.455 in effect as of January 1 of
each year in completing the prescribed form to be given to the
purchaser prior to execution of a binding contract of sale and
purchase. Nothing contained in the preceding sentence shall be
construed to create an affirmative duty on the part of a seller
or any persons completing the prescribed notice in the seller's
behalf to provide more recent information than the information
taken from the information form and map or plat filed of record
by the district as of January 1 of each year in completing the
prescribed notice to be given to the purchaser prior to execution
of a binding contract of sale and purchase. All subsequent
sellers, purchasers, title insurance companies, examining
attorneys, and lienholders shall be entitled to rely upon the
information form and map or plat filed by the district.
(h) If such notice is given at closing as provided in
Subsection (e), a purchaser, or the purchaser's heirs,
successors, or assigns, shall not be entitled to maintain any
action for damages or maintain any action against a seller, title
insurance company, or lienholder, or any agent, representative,
or person acting in their behalf, by reason of use by the seller
of the information filed for record by the district or reliance
by the seller on the filed plat and filed legal description of
the district in determining whether the property to be sold and
purchased is within the district. No action may be maintained
against any title company for failure to disclose the inclusion
of the described real property within a district when the
district has not filed for record the information form, map, or
plat with the clerk of the county or counties in which the
district is located.
(i) Any purchaser who purchases any real property in a district
and who thereafter sells or conveys the same shall on closing of
such subsequent sale be conclusively considered as having waived
any prior right to damages under this section.
(j) It is the express intent of this section that all sellers,
title insurance companies, examining attorneys, vendors of
property and tax information, real estate brokers, and
lienholders, and any agent, representative, or person acting on
their behalf, shall be entitled to rely on the accuracy of the
information form and map or plat as last filed by each district
or the information contained in or shown on the notice form
issued by the district under Section 49.453, or for the purposes
of the notice to be given the purchaser prior to execution of a
binding contract of sale and purchase the information contained
in or shown on the information form and map or plat filed of
record by the district in effect as of January 1 of each year for
the period January 1 through December 31 of such calendar year.
(k) Except as otherwise provided in Subsection (c), if any sale
or conveyance of real property within a district is not made in
compliance with the provisions of this section, the purchaser may
institute a suit for damages under the provisions of either
Subsection (l) or (m).
(l) A purchaser of real property covered by the provisions of
this section, if the sale or conveyance of the property is not
made in compliance with this section, may institute a suit for
damages in the amount of all costs relative to the purchase of
the property plus interest and reasonable attorney's fees. The
suit for damages may be instituted jointly or severally against
the person, firm, corporation, partnership, organization,
business trust, estate, trust, association, or other legal entity
that sold or conveyed the property to the purchaser. Following
the recovery of damages under this subsection, the amount of the
damages shall first be paid to satisfy all unpaid obligations on
each outstanding lien or liens on the property and the remainder
of the damage amount shall be paid to the purchaser. On payment
of all damages respectively to the lienholders and purchaser, the
purchaser shall reconvey the property to the seller.
(m) A purchaser of real property covered by the provisions of
this section, if the sale or conveyance of the property is not
made in compliance with this section, may institute a suit for
damages in an amount not to exceed $5,000, plus reasonable
attorney's fees.
(n) A purchaser is not entitled to recover damages under both
Subsections (l) and (m), and entry of a final decision awarding
damages to the purchaser under either Subsection (l) or (m) shall
preclude the purchaser from recovering damages under the other
subsection. Notwithstanding any part or provision of the general
or special laws or the common law of the state to the contrary,
the relief provided under Subsections (l) and (m) shall be the
exclusive remedies for a purchaser aggrieved by the seller's
failure to comply with the provisions of this section. Any
action for damages shall not, however, apply to, affect, alter,
or impair the validity of any existing vendor's lien, mechanic's
lien, or deed of trust lien on the property.
(o) A suit for damages under the provisions of this section
must be brought within 90 days after the purchaser receives the
first district tax notice or within four years after the property
is sold or conveyed to the purchaser, whichever time occurs
first, or the purchaser loses the right to seek damages under
this section.
(p) Notwithstanding any provisions of this subchapter to the
contrary, a purchaser may not recover damages of any kind under
this section if that person:
(1) purchases an equity in real property and in conjunction
with the purchase assumes any liens, whether purchase money or
otherwise; and
(2) does not require proof of title by abstract, title
policy, or any other proof of title.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.453. Notice Form From District.
(a) A district covered by Section 49.452 shall also maintain in
the district office the particular form of Notice to Purchasers
required by Section 49.452 to be furnished by a seller to a
purchaser of real property in that district and shall, upon
written request of any person, issue the notice form completed by
a district with all information required to be furnished by the
district. A notice form issued by a district under the
provisions of this section shall include a written statement that
the notice form is being issued by the district, the date of its
issuance, and the district's telephone number. A district shall
not be required to orally provide the information.
(b) A district may charge a reasonable fee as determined by the
district not to exceed $10 for the issuance of a notice form
pursuant to Subsection (a). The notice form shall be delivered
by regular mail or made available at the district's office. If a
district is requested to deliver the notice form to a person by
an alternative method, the district may impose a charge not to
exceed the actual cost of such delivery.
(c) A district may delegate the responsibility for issuance of
the particular form of Notice to Purchasers to an employee or
agent of the district. A district shall file with the commission
the name, address, and telephone number of the employee or agent
of the district responsible for issuance of the notice forms and
shall notify the commission in writing within seven days after
there is a change to the information required to be filed with
the commission under the provisions of this subsection.
(d) Any notice issued by the district shall contain the
information effective as of the date of its issuance.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.454. Notice of Unpaid Standby Fees.
(a) A district covered by Section 49.452 shall, on the written
request of any person, issue a certificate stating the amount of
any unpaid standby fees, including interest on the fees, that
have been assessed against a tract of property in the district.
The district may charge a fee not to exceed $10 for each
certificate. A certificate issued through fraud or collusion is
void.
(b) If the district issues a certificate containing an
erroneous statement under Subsection (a) and the owner of the
property transfers the property to a good faith purchaser for
value, the lien on the property provided by Section 49.231(k) is
extinguished to the extent of the error.
(c) This section does not affect the liability for any unpaid
standby fees of the former owner of the undeveloped property
under Section 49.231(k).
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.455. Filing Information.
(a) The board covered by the provisions of Section 49.452 shall
file with the county clerk in each of the counties in which all
or part of the district is located a duly affirmed and
acknowledged information form that includes the information
required in Subsection (b), and a complete and accurate map or
plat showing the boundaries of the district.
(b) The information form filed by a district under this section
shall include:
(1) the name of the district;
(2) the complete and accurate legal description of the
boundaries of the district;
(3) the most recent rate of district taxes on property
located in the district;
(4) the total amount of bonds that have been approved by the
voters and which may be issued by the district (excluding
refunding bonds and any bonds or portion of bonds payable
solely from revenues received or expected to be received
pursuant to a contract with a governmental entity);
(5) the aggregate initial principal amount of all bonds of
the district payable in whole or part from taxes (excluding
refunding bonds and any bonds or portion of bonds payable
solely from revenues received or expected to be received
pursuant to a contract with a governmental entity) that have
been previously issued;
(6) whether a standby fee is imposed by the district and, if
so, the amount of the standby fee;
(7) the date on which the election to confirm the creation
of the district was held if such was required;
(8) a statement of the functions performed or to be
performed by the district; and
(9) the particular form of Notice to Purchasers required by
Section 49.452 to be furnished by a seller to a purchaser of
real property in that district completed by the district with
all information required to be furnished by the district.
If a district has not yet levied taxes, a statement to such
effect together with the district's most recent projected rate of
debt service tax shall be substituted for Subdivisions (3) and
(4).
(c) The information form and map or plat required by this
section shall be signed by a majority of the members of the board
and by each such officer affirmed and acknowledged before it is
filed with the county clerk, and each amendment made to an
information form or map shall also be signed by the members of
the board and by each such officer affirmed and acknowledged
before it is filed with the county clerk.
(d) The information form required by this section shall be
filed with the county clerk within 48 hours after the effective
date of this section or within 48 hours after the district is
officially created, whichever time comes first. For purposes of
this section, the words "officially created" mean the date and
hour in which the results of the election to confirm the creation
of the district are declared.
(e) Within seven days after there is a change in any of the
information contained in the district information form, map, or
plat, the district shall file an amendment to the information
form, map, or plat setting forth the changes made.
(f) Any person who affirms the corrections and accuracy of and
acknowledges an information form, map, or plat, or any amendment
to an information form, map, or plat that includes information
that is inaccurate or incorrect shall be guilty of a misdemeanor
and shall be fined not less than $100 nor more than $1,000 for
each violation.
(g) If a district fails to file the information required by
this section in the time required, the executive director may
request the state attorney general or the district or county
attorney of the county in which the district is located to seek a
writ of mandamus to force the board to prepare and file the
necessary information.
(h) Any member of a governing board who wilfully fails or
refuses to join in filing an information form, map, or plat or an
amendment to an information form, map, or plat under this section
shall be guilty of a misdemeanor and shall be fined not less than
$100 nor more than $1,000 for each violation. A member of a
governing board is presumed to have wilfully failed or refused to
join in the filing of an information form, map, or plat or an
amendment to an information form, map, or plat if that member was
present at the meeting at which the information included in the
information form, map, or plat or amendment to the information
form, map, or plat was adopted.
(i) If a district covered by this section is dissolved, annexed
to another local government, or consolidated with another
district, the members of the board shall file a statement of this
fact together with the effective date of the dissolution,
annexation, or consolidation with the information form. After a
district is dissolved and the statement is filed under this
subsection, a person who sells or conveys property within the
dissolved district is no longer required to give notice under
Section 49.452.
(j) A copy of all information forms, maps, or plats and
amendments to these filed under this section shall also be filed
with the executive director.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 24, eff.
Sept. 1, 1997.
Sec. 49.456. Bankruptcy of Districts; Authority of Commission.
(a) Notwithstanding Section 140.001, Local Government Code, or
any other law of this state, a district created under Sections
52(b)(1) and (2), Article III, or Section 59, Article XVI, Texas
Constitution, that is subject to the continuing supervision of
the commission may not proceed under Chapter 9 of the Federal
Bankruptcy Code (11 U.S.C. Sections 901-946) or any other law
enacted by the Congress of the United States under federal
bankruptcy authority until the commission authorizes the district
to proceed under those laws by written order.
(b) A district requesting the commission's authorization to
proceed under Chapter 9 of the Federal Bankruptcy Code (11 U.S.C.
Sections 901-946) or any other federal bankruptcy law shall file
an application with the commission requesting authorization.
(c) The commission shall investigate the financial condition of
a district submitting an application under Subsection (b),
including its assets, liabilities, and sources of revenues and
may require a district to submit any information that the
commission considers material to a determination of whether
authorization to proceed in bankruptcy should be granted.
(d) The commission may not authorize a district to proceed in
bankruptcy unless the commission determines that the district
cannot, through the full exercise of its rights and powers under
the laws of this state, reasonably expect to meet its debts and
other obligations as they mature.
(e) The commission shall adopt and assess reasonable and
necessary fees adequate to recover the costs of the commission in
administering this section.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995