Texas Laws - Water Code
WATER CODE
TITLE 4. GENERAL LAW DISTRICTS

CHAPTER 49. PROVISIONS APPLICABLE TO ALL DISTRICTS (15767)(1-click HTML)

Sec. 49.001. DEFINITIONS. (15768)(1-click HTML)

(a) As used in this chapter: (15769)

(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, any conservation and reclamation district created pursuant to Chapter 62, Acts of the 52nd Legislature, 1951 (Article 8280-141, Vernon's Texas Civil Statutes), or any conservation and reclamation district governed by Chapter 36 unless a special law creating the district or amending the law creating the district states that this chapter applies to that district. (15770)

(2) "Commission" means the Texas Natural Resource Conservation Commission. (15771)

(3) "Board" means the governing body of a district. (15772)

(4) "Executive director" means the executive director of the commission. (15773)

(5) "Water supply corporation" means a nonprofit water supply or sewer service corporation created or operating under Chapter 67. (15774)

(6) "Director" means either a supervisor or director appointed or elected to the board. (15775)

(7) "Municipal solid waste" has the same meaning assigned by Section 361.003, Health and Safety Code. (15776)

(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: (15777)

(A) is a provider of water or wastewater service to two or more municipalities; and (15778)

(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. (15779)

(9) "Potable water" means water that has been treated for public drinking water supply purposes. (15780)

(10) "District facility" means tangible real and personal property of the district, including any plant, equipment, means, recreational facility as defined by Section 49.462, or instrumentality owned, leased, operated, used, controlled, furnished, or supplied for, by, or in connection with the business or operations of a district. The term specifically includes a reservoir or easement of a district. (15781)

(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. (15782)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.66, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1354, Sec. 4, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 343, Sec. 1. (15783)

Sec. 49.002. APPLICABILITY. (15784)(1-click HTML)

(a) Except as provided by Subsection (b), 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. (15785)

(b) This chapter does not apply to a district governed by Chapter 36 unless a special law creating the district or amending the law creating the district states that this chapter applies to that district. (15786)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 5, eff. Sept. 1, 1999. (15787)

Sec. 49.003. PENALTY. (15788)(1-click HTML)

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. (15789)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15790)

Sec. 49.004. PENALTY FOR VIOLATION OF DISTRICT RULES. (15791)(1-click HTML)

(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. (15792)

(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. (15793)

(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. (15794)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15795)

SUBCHAPTER B. CREATION (15796)(1-click HTML)
Sec. 49.010. ORDER OR ACT CREATING DISTRICT. (15797)(1-click HTML)

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. (15798)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15799)

Sec. 49.011. NOTICE APPLICABLE TO CREATION OF A DISTRICT BY THE COMMISSION. (15800)(1-click HTML)

(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. (15801)

(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. (15802)

(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). (15803)

(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. (15804)

Added by Acts 1997, 75th Leg., ch. 1070, Sec. 2, eff. Sept. 1, 1997. (15805)

SUBCHAPTER C. ADMINISTRATIVE PROVISIONS (15806)(1-click HTML)
Sec. 49.051. BOARD OF DIRECTORS. (15807)(1-click HTML)

A district shall be governed by its board, the number of which is otherwise provided by law. (15808)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15809)

Sec. 49.052. DISQUALIFICATION OF DIRECTORS. (15810)(1-click HTML)

(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: (15811)

(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; (15812)

(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; (15813)

(3) is a developer of property in the district; (15814)

(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; (15815)

(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 (15816)

(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 (15817)

(6) during the term of office, fails to maintain the qualifications required by law to serve as a director. (15818)

(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. (15819)

(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. (15820)

(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. (15821)

(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. (15822)

(f) This section shall not apply to special water authorities, districts described in Section 49.181(h)(1)(D), 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. (15823)

(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. (15824)

(h) This subsection applies only to a district that is located wholly within the boundaries of a municipality with a population of more than 1.5 million, that is governed by Chapter 375, Local Government Code, and that is governed by an appointed board consisting of nine or more members. Notwithstanding Subsection (f) or (g), a person is considered to have resigned from serving as a member of the board if the person fails to attend three consecutive meetings of the board. The remaining board members by majority vote may waive the resignation under this subsection if fairness requires that the absences be excused on the basis of illness or other good cause. (15825)

(i) Notwithstanding any other law, a director is eligible to serve on the board of a district governed by Chapter 375, Local Government Code, regardless of the municipality in which the director resides, if: (15826)

(1) the district is located within the boundaries of a municipality with a population of more than 1.8 million; and (15827)

(2) all or a part of the district is located more than five miles from the downtown city hall of that municipality. (15828)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2003, 78th Leg., ch. 248, Sec. 6, eff. June 18, 2003. (15829)

Amended by: (15830)

Acts 2011, 82nd Leg., R.S., Ch. 156 (H.B. 1901), Sec. 2, eff. May 28, 2011. (15831)

Sec. 49.053. QUORUM. (15832)(1-click HTML)

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. (15833)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15834)

Sec. 49.054. OFFICERS. (15835)(1-click HTML)

(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. (15836)

(b) After each directors election, the board shall meet and elect officers. (15837)

(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. (15838)

(d) Repealed by Acts 2003, 78th Leg., ch. 1276, Sec. 18.007. (15839)

(e) 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. (15840)

(f) 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. (15841)

(g) This section does not apply to special water authorities. (15842)

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; Acts 1999, 76th Leg., ch. 1354, Sec. 6, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 69, Sec. 5, eff. May 14, 2001; Acts 2001, 77th Leg., ch. 1423, Sec. 1, eff. June 17, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 18.007, eff. Sept. 1, 2003. (15843)

Sec. 49.055. SWORN STATEMENT, BOND, AND OATH OF OFFICE. (15844)(1-click HTML)

(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. (15845)

(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. (15846)

(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. (15847)

(d) The sworn statement shall be filed as prescribed by the constitution. The bond and oath shall be filed with the district and retained in its records. A duplicate original of the oath shall also be filed with the secretary of state within 10 days after its execution and need not be filed before the new director begins to perform the duties of office. (15848)

(e) This section does not apply to special water authorities. (15849)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 249, Sec. 2, eff. Aug. 30, 1999. (15850)

Sec. 49.056. GENERAL MANAGER. (15851)(1-click HTML)

(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. (15852)

(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. (15853)

(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. (15854)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15855)

Sec. 49.057. MANAGEMENT OF DISTRICT. (15856)(1-click HTML)

(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. (15857)

(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. (15858)

(c) The board shall set the compensation and terms for consultants. (15859)

(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). (15860)

(e) Except as provided by Subsection (i), 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. (15861)

(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. (15862)

(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. (15863)

(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. (15864)

(i) The board may obtain or require an officer, employee, or consultant of the district to obtain insurance or coverage under an interlocal agreement that covers theft of district funds by officers, employees, or consultants of the district in lieu of requiring a bond under Subsection (e) if the board determines that the insurance or coverage under an interlocal agreement would adequately protect the interests of the district. (15865)

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; Acts 1999, 76th Leg., ch. 1354, Sec. 7, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 69, Sec. 2, eff. May 14, 2001; Acts 2001, 77th Leg., ch. 1423, Sec. 2, eff. June 17, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 18.008, eff. Sept. 1, 2003. (15866)

Amended by: (15867)

Acts 2005, 79th Leg., Ch. 868 (S.B. 1045), Sec. 1, eff. June 17, 2005. (15868)

Sec. 49.058. CONFLICTS OF INTEREST. (15869)(1-click HTML)

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. (15870)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15871)

Sec. 49.059. TAX ASSESSOR AND COLLECTOR. (15872)(1-click HTML)

(a) A district may employ or contract with any person to serve as its tax assessor and collector who is: (15873)

(1) an individual certified as a registered Texas assessor-collector; or (15874)

(2) a firm, organization, association, partnership, corporation, or other legal entity if an individual certified as a registered Texas assessor-collector owns an interest in or is employed by the firm, organization, association, partnership, corporation, or other legal entity. (15875)

(b) A tax assessor and collector employed or contracted for under this section is not required to be a natural person. (15876)

(c) A firm, organization, association, partnership, corporation, or other legal entity serving as district tax assessor and collector shall give a bond as required by Section 49.057 for a natural person. (15877)

(d) 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: (15878)

(1) is a natural person 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; (15879)

(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; (15880)

(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 (15881)

(4) is directly or through a corporation developing land in the district or is a director, engineer, or attorney for the district. (15882)

(e) Within 60 days after the board determines a relationship or employment exists which constitutes a disqualification under Subsection (d), it shall replace the person serving as tax assessor and collector with a person who would not be disqualified. (15883)

(f) Any person who wilfully violates the provisions of Subsection (d) is guilty of a misdemeanor and on conviction shall be fined not less than $100 nor more than $1,000. (15884)

(g) As used in this section, "developer of property in the district" has the same meaning as in Section 49.052(d). (15885)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15886)

Amended by: (15887)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 4, eff. September 1, 2013. (15888)

Sec. 49.060. FEES OF OFFICE; REIMBURSEMENT. (15889)(1-click HTML)

(a) A director is entitled to receive fees of office of not more than $150 a day for each day the director actually spends performing the duties of a director. In this subsection, "performing the duties of a director" means substantive performance of the management or business of the district, including participation in board and committee meetings and other activities involving the substantive deliberation of district business and in pertinent educational programs. The phrase does not include routine or ministerial activities such as the execution of documents, self-preparation for meetings, or other activities requiring a minimal amount of time. (15890)

(a-1) A district, by resolution of the board, shall set a limit on the fees of office that a director may receive in a year. Except for a district that is a special water authority engaged in the distribution and sale of electric energy to the public, a district may not set the annual limit at an amount greater than $7,200. (15891)

(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. (15892)

(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. (15893)

(d) Repealed by Acts 2003, 78th Leg., ch. 736, Sec. 2. (15894)

(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. (15895)

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; Acts 2001, 77th Leg., ch. 1423, Sec. 3, eff. June 17, 2001; Acts 2003, 78th Leg., ch. 736, Sec. 1, 2, eff. June 20, 2003. (15896)

Sec. 49.061. SEAL. (15897)(1-click HTML)

The directors shall adopt a seal for the district. (15898)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15899)

Sec. 49.062. OFFICES AND MEETING PLACES. (15900)(1-click HTML)

(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. (15901)

(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. (15902)

(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. (15903)

(d) Two or more districts may designate and share offices and meeting places. This section does not apply to special water authorities. (15904)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15905)

Sec. 49.063. NOTICE OF MEETINGS. (15906)(1-click HTML)

(a) 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. (15907)

(b) The validity of an action taken at a board meeting is not affected by: (15908)

(1) failure to provide notice of the meeting if the meeting is a regular meeting; (15909)

(2) an insubstantial defect in notice of the meeting; or (15910)

(3) failure of a county clerk to timely or properly post or maintain public access to a notice of the meeting if notice of the meeting is furnished to the county clerk in sufficient time for posting under Section 551.043(a) or 551.045, Government Code. (15911)

(c) This subsection applies only to notice for the district's first meeting of each calendar year. A district that does not have a meeting place within the district shall include in the notice required under Subsection (a) a description of the petition process under Section 49.062(c). (15912)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15913)

Amended by: (15914)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 5, eff. September 1, 2013. (15915)

Acts 2017, 85th Leg., R.S., Ch. 907 (S.B. 554), Sec. 1, eff. September 1, 2017. (15916)

Sec. 49.064. MEETINGS. (15917)(1-click HTML)

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. (15918)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15919)

Sec. 49.065. RECORDS. (15920)(1-click HTML)

(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. (15921)

(b) The records of each district are the property of the district and are subject to the open records law, Chapter 552, Government Code. (15922)

(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. (15923)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15924)

Sec. 49.066. SUITS. (15925)(1-click HTML)

(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. A suit for contract damages may be brought against a district only on a written contract of the district approved by the district's board. All courts shall take judicial notice of the creation of the district and of its boundaries. (15926)

(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. (15927)

(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. (15928)

(d) Except as provided in Subsection (e), no suit may be instituted in any court of this state contesting: (15929)

(1) the validity of the creation and boundaries of a district created under this code; (15930)

(2) any bonds or other obligations created under this code; or (15931)

(3) the validity or the authorization of a contract with the United States by the district. (15932)

(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. (15933)

(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. (15934)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 8, eff. Sept. 1, 1999. (15935)

Sec. 49.067. CONTRACTS. (15936)(1-click HTML)

(a) A district shall contract, and be contracted with, in the name of the district. (15937)

(b) Notwithstanding any other law, a contract for technical, scientific, legal, fiscal, or other professional services must be approved by the board unless specifically delegated by board action. The terms and conditions of such a contract, including the terms for payment, are subject to the decision of the board unless specifically delegated by board action. The board through such action cannot abrogate its fiscal responsibility. (15938)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2003, 78th Leg., ch. 248, Sec. 7, eff. June 18, 2003. (15939)

Sec. 49.068. CONTRACTS WITH GOVERNMENTAL AGENCIES. (15940)(1-click HTML)

(a) 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. (15941)

(b) The provisions of other law or a home-rule municipal charter notwithstanding, a municipality may contract with a district. The term of a contract under this subsection may be of unlimited duration. (15942)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2003, 78th Leg., ch. 248, Sec. 8, eff. June 18, 2003. (15943)

Sec. 49.069. EMPLOYEE BENEFITS. (15944)(1-click HTML)

(a) The board may provide for and administer retirement, disability, and death compensation funds for the employees of the district. (15945)

(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). (15946)

(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. (15947)

(d) The board may establish a sick leave pool for employees of the district in the same manner as that authorized for the creation of a sick leave pool for state employees by Subchapter A, Chapter 661, Government Code. (15948)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 9, eff. Sept. 1, 1999. (15949)

Sec. 49.070. WORKERS' COMPENSATION. (15950)(1-click HTML)

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. (15951)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15952)

Sec. 49.071. DISTRICT NAME CHANGE. (15953)(1-click HTML)

(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. (15954)

(b) A name change takes effect on the date of issuance of the commission order making the name change. (15955)

(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. (15956)

(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. (15957)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15958)

Sec. 49.072. LIMITATION ON FUTURE EMPLOYMENT. (15959)(1-click HTML)

(a) A person who has served as a director of a district may not contract with that district or be employed by an organization to which the district has awarded a contract for one year following the date on which the person ceased to serve as a director. (15960)

(b) This section does not apply to a person who has served as a director of a district that performs agricultural irrigation functions under Chapter 51, 55, or 58 if the person, when serving as a director, was required to own land as a qualification for office. (15961)

Added by Acts 2003, 78th Leg., ch. 469, Sec. 1, eff. Sept. 1, 2003. (15962)

SUBCHAPTER D. ELECTION PROVISIONS (15963)(1-click HTML)
Sec. 49.101. GENERAL. (15964)(1-click HTML)

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. (15965)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (15966)

Sec. 49.102. CONFIRMATION AND DIRECTOR ELECTION. (15967)(1-click HTML)

(a) Before issuing any bonds or other obligations, an election shall be held within the boundaries of the proposed district on a uniform election date provided by Section 41.001, Election Code, 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. (15968)

(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, if applicable, the number of directors to be voted on. (15969)

(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. If the district has received an application by a write-in candidate, the ballots shall also have blank places after the names of the temporary directors in which a voter may write the names of any candidates appearing on the list of write-in candidates required by Section 146.031, Election Code. (15970)

(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. (15971)

(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. (15972)

(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. (15973)

(g) The temporary board shall also declare the persons receiving the highest number of votes for directors to have been elected as permanent directors. (15974)

(h) Unless otherwise agreed, the elected directors shall decide the initial terms of office by lot, with a simple majority of the elected directors serving until the second succeeding directors election and the remaining elected directors serving until the next directors election. (15975)

(i) A district, at an election required under Subsection (a), may submit to the qualified voters of the district the proposition of whether a plan as authorized by Section 49.351 should be implemented or entered into by the district. (15976)

(j) 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. (15977)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2001, 77th Leg., ch. 1423, Sec. 4, eff. June 17, 2001. (15978)

Amended by: (15979)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 6, eff. September 1, 2013. (15980)

Sec. 49.1025. QUALIFIED VOTERS IN CONFIRMATION ELECTION. (15981)(1-click HTML)

(a) In this section, "developer of property in the district" has the meaning assigned by Section 49.052(d). (15982)

(b) A voter in a confirmation election or an election held jointly with a confirmation election on the same date and in conjunction with the confirmation election to authorize taxes and bonds must be a qualified voter of the district. For the purposes of an election described by this subsection, a person is not a qualified voter if the person: (15983)

(1) on the date of the election: (15984)

(A) is a developer of property in the district; (15985)

(B) is related within the third degree of affinity or consanguinity to a developer of property in the district; (15986)

(C) is an employee of a developer of property in the district; or (15987)

(D) has resided in the district less than 30 days; or (15988)

(2) received monetary consideration from a developer of property in the district in exchange for the person's vote. (15989)

(c) In addition to the procedures for accepting a voter under Section 63.001, Election Code, the election officer shall provide to the voter the form of the affidavit required by this section. The election officer must receive a completed affidavit before marking the voter as accepted under Section 63.001(e), Election Code. If the voter does not submit a completed affidavit to the election officer or the information stated on the affidavit demonstrates the voter is not a qualified voter as provided by this section, the voter may be accepted only to vote provisionally under Section 63.011, Election Code. (15990)

(d) The district shall submit original or certified copies of voter affidavits to the office of the attorney general in a transcript of the proceedings of the confirmation election. (15991)

(e) The office of the attorney general shall prescribe the form of the voter affidavit. (15992)

(f) The voter affidavit must require the voter to state under oath: (15993)

(1) the address of the voter and that the voter resides in the territory of the district; (15994)

(2) the date the voter changed the voter's residence to the address provided under Subdivision (1); and (15995)

(3) that the voter, to the best of the voter's knowledge, believes that the voter's registration is effective on the date of the election. (15996)

(g) The affidavit must include the following statement: (15997)

"I am not a developer of property in the district, related within the third degree of affinity or consanguinity to a developer of property in the district, or an employee of a developer of property in the district. I have not received monetary consideration from a developer of property in the district for my vote in this election." (15998)

(h) Compliance with this section or the validity of a voter affidavit may only be challenged in an election contest under Title 14, Election Code. (15999)

Added by Acts 2017, 85th Leg., R.S., Ch. 848 (H.B. 2358), Sec. 1, eff. January 1, 2018. (16000)

Sec. 49.103. TERMS OF OFFICE OF DIRECTORS. (16001)(1-click HTML)

(a) Except as provided by Section 49.102, the members of the board of a district shall serve staggered four-year terms. (16002)

(b) Unless a district holds its general election for officers on a date as otherwise provided by statute, after confirmation of a district, an election shall be held on the uniform election date, provided by Section 41.001, Election Code, in May of each even-numbered year to elect the appropriate number of directors. (16003)

(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. (16004)

(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. (16005)

(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. (16006)

(f) This section does not apply to: (16007)

(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 (16008)

(2) a special utility district operating under Chapter 65. (16009)

(g) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 105, Sec. 32, eff. September 1, 2013. (16010)

(h) If authorized by the board in the proceedings calling a director election, the secretary of the board or the secretary's designee, on receipt of the certification required by Section 2.052(b), Election Code, shall post notice that the election is not to be held. The notice must be posted, on or before the commencement of early voting, at each polling place that would have been used in the election. If the notice is timely posted: (16011)

(1) the board or the board's designee is not required to: (16012)

(A) post or publish notice of the election; (16013)

(B) prepare or print ballots and election materials; or (16014)

(C) hold early and regular voting; and (16015)

(2) the board shall meet at the earliest practicable time to declare each unopposed candidate elected to office. (16016)

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; Acts 2001, 77th Leg., ch. 340, Sec. 5, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 248, Sec. 9, eff. June 18, 2003. (16017)

Amended by: (16018)

Acts 2005, 79th Leg., Ch. 471 (H.B. 57), Sec. 5, eff. October 1, 2005. (16019)

Acts 2011, 82nd Leg., R.S., Ch. 91 (S.B. 1303), Sec. 26.006, eff. September 1, 2011. (16020)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 7, eff. September 1, 2013. (16021)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 32, eff. September 1, 2013. (16022)

Acts 2017, 85th Leg., R.S., Ch. 127 (H.B. 999), Sec. 1, eff. September 1, 2017. (16023)

Sec. 49.104. ALTERNATIVE ELECTION PROCEDURES. (16024)(1-click HTML)

(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: (16025)

(1) are within buildings open to the public; (16026)

(2) are within the boundaries of at least one of the districts; (16027)

(3) meet the requirements of the Election Code and general laws as polling places; and (16028)

(4) are located not more than five miles from any portion of the boundaries of any of the participating districts. (16029)

(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. (16030)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16031)

Sec. 49.1045. CERTIFICATION OF ELECTION RESULTS IN LESS POPULOUS DISTRICTS. (16032)(1-click HTML)

(a) This section applies only to a district that: (16033)

(1) has 10 or fewer registered voters; and (16034)

(2) holds an election jointly with a county in which the district is wholly or partly located. (16035)

(b) A district may provide for an inquiry into and certification of the voting results of an election under this section if: (16036)

(1) the election results indicate that the number of votes cast in the election was greater than the number of registered voters in the district; (16037)

(2) the board determines that the election results are likely to be disputed in court; and (16038)

(3) the board can determine from the official list of registered voters prepared by the county voter registrar or county elections administrator for the district election which voters were qualified to vote in the district election and can determine from the signature roster from the joint election who voted in the joint election. (16039)

(c) To certify the district votes, the board by rule shall adopt a procedure to determine for each person who signed the signature roster as a voter in the joint election: (16040)

(1) whether the person's address on the day of the election was in the district; and (16041)

(2) how the person voted in the district election. (16042)

(d) The certified votes are the official election results. (16043)

(e) Certification of the results under this section does not preclude the filing of an election contest. (16044)

Added by Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 8, eff. September 1, 2013. (16045)

Sec. 49.105. VACANCIES. (16046)(1-click HTML)

(a) Except as otherwise provided in this code, a vacancy on the board and in other offices shall be filled for the unexpired term by appointment of the board not later than the 60th day after the date the vacancy occurs. (16047)

(b) If the board has not filled a vacancy by appointment before the 61st day after the date the vacancy occurs, a petition, signed by more than 10 percent of the registered voters of the district, requesting the board to fill the vacancy by appointment may be presented to the board. (16048)

(c) If the number of directors is reduced to fewer than a majority or if a vacancy continues beyond the 90th day after the date the vacancy occurs, the vacancy or vacancies may be filled by appointment by the commission if the district is required by Section 49.181 to obtain commission approval of its bonds or by the county commissioners court if the district was created by the county commissioners court, regardless of whether a petition has been presented to the board under Subsection (b). An appointed director shall serve for the unexpired term of the director he or she is replacing. (16049)

(d) 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 an election held by the district, the current members of the board or temporary board holding the positions not filled at such election shall be deemed to have been elected and shall serve an additional term of office, or, in the case of a temporary board member deemed elected under this subsection, the initial term of office. (16050)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 10, eff. Sept. 1, 1999. (16051)

Amended by: (16052)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 9, eff. September 1, 2013. (16053)

Sec. 49.106. BOND ELECTIONS. (16054)(1-click HTML)

(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. The engineer's report is not: (16055)

(1) part of the proposition or propositions to be voted on; or (16056)

(2) a contract with the voters. (16057)

(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. (16058)

(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. (16059)

(d) A bond election may be called as a result of an agreement to annex additional territory into the district. (16060)

(e) A district's authorization to issue bonds resulting from an election held under this section, or any other law that allows for the qualified voters of a district to authorize the issuance of bonds by a district, remains in effect after the election unless the district is dissolved or is annexed by another district. (16061)

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; Acts 2001, 77th Leg., ch. 1423, Sec. 5, eff. June 17, 2001; Acts 2003, 78th Leg., ch. 248, Sec. 10, eff. June 18, 2003. (16062)

Sec. 49.107. OPERATION AND MAINTENANCE TAX. (16063)(1-click HTML)

(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. (16064)

(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. (16065)

(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. (16066)

(d) The proposition in an operation and maintenance tax election may be for a specific maximum rate or for an unlimited rate. (16067)

(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. (16068)

(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. (16069)

(g) Sections 26.04, 26.05, and 26.07, Tax Code, do not apply to a tax levied and collected under this section or an ad valorem tax levied and collected for the payment of the interest on and principal of bonds issued by a district. (16070)

(h) To the extent authorized by Section 59, Article XVI, Texas Constitution, an operation and maintenance tax to be used for recreational facilities, as defined by Section 49.462, levied by a district located in a county with a population of more than 3.3 million or in a county adjacent to that county may not exceed 10 cents per $100 of assessed valuation of taxable property in the district. (16071)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2001, 77th Leg., ch. 1423, Sec. 6, eff. June 17, 2001; Acts 2003, 78th Leg., ch. 343, Sec. 2. (16072)

Sec. 49.108. CONTRACT ELECTIONS. (16073)(1-click HTML)

(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. (16074)

(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. (16075)

(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. (16076)

(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. (16077)

(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 or bonds issued by a municipality. (16078)

(f) Sections 26.04, 26.05, and 26.07, Tax Code, do not apply to a tax levied and collected for payments made under a contract approved in accordance with this section. (16079)

(g) On or before the first day for early voting by personal appearance at an election held to authorize a contract, a substantially final form of the contract must be filed in the office of the district and must be open to inspection by the public. The contract is not required to be attached as an exhibit to the order calling the election to authorize the contract. (16080)

(h) A single contract may contain multiple purposes or provisions for multiple facilities authorized by one or more constitutional provisions. The contract may generally describe the facilities to be acquired or financed by the district without reference to specific constitutional provisions. A contract described by this subsection may be submitted for approval in a single proposition at an election. (16081)

(i) A contract between districts to provide facilities or services is not required to specify the maximum amount of bonds or expenditures authorized under the contract if: (16082)

(1) the contract provides that the service area cannot be enlarged without the consent of at least two-thirds of the boards of directors of the districts that are: (16083)

(A) included in the service area as proposed to be enlarged; or (16084)

(B) served by the facilities or services provided in the contract; (16085)

(2) the contract provides that bonds or expenditures, payable wholly or partly from contract taxes, are issued or made: (16086)

(A) on an emergency basis; or (16087)

(B) to purchase, construct, acquire, own, operate, repair, improve, or extend services or facilities necessary to comply with changes in applicable regulatory requirements; or (16088)

(3) the contract provides that the bonds or expenditures require prior approval by any district that is obligated to pay debt service on those bonds or to pay for those expenditures wholly or partly with contract taxes. (16089)

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; Acts 2001, 77th Leg., ch. 1160, Sec. 1, eff. June 15, 2001; Acts 2001, 77th Leg., ch. 1423, Sec. 7, eff. June 17, 2001. (16090)

Amended by: (16091)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 10, eff. September 1, 2013. (16092)

Sec. 49.109. AGENT DURING ELECTION PERIOD. (16093)(1-click HTML)

The board may appoint a person, including a district officer, employee, or consultant, to serve as the district's agent under Section 31.123, Election Code. (16094)

Added by Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 11, eff. September 1, 2013. (16095)

Sec. 49.110. ELECTION JUDGE. (16096)(1-click HTML)

(a) The notice requirements for the appointment of a presiding election judge under Section 32.009, Election Code, do not apply to an election held by a district. (16097)

(b) To serve as an election judge in an election held by a district, a person must be a registered voter of the county in which the district is wholly or partly located. To the extent of any conflict with Section 32.051, Election Code, this section controls. (16098)

Added by Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 11, eff. September 1, 2013. (16099)

Sec. 49.111. EXEMPTIONS FROM USE OF ACCESSIBLE VOTING SYSTEMS. (16100)(1-click HTML)

(a) Notwithstanding Sections 61.012 and 61.013, Election Code, a district is exempt from the acquisition, lease, or use of an electronic voting system for an election if: (16101)

(1) the election is a confirmation election or an election held jointly with a confirmation election on the same date and in conjunction with the confirmation election, except for an election in which a federal office appears on the ballot; (16102)

(2) the most recently scheduled district directors' election was not held, as provided by Section 2.053(b), Election Code; or (16103)

(3) fewer than 250 voters voted at the most recently held district directors' election. (16104)

(b) A district eligible for the exemption under Subsection (a) must publish notice in a newspaper of general circulation in an area that includes the district or mail notice to each voter in the district regarding the district's intention to hold an election without providing a voting station that meets the requirements for accessibility under 42 U.S.C. Section 15481(a)(3) on election day and during the period for early voting by personal appearance. The notice must be published or mailed not later than the later of: (16105)

(1) the 75th day before the date of the election; or (16106)

(2) the date on which the district adopts the order calling the election. (16107)

(c) The notice required by Subsection (b) must: (16108)

(1) provide that any voter in the district may request the use of a voting station that meets the accessibility requirements for voting by a person with a disability; and (16109)

(2) provide information on how to submit such a request. (16110)

(d) The district shall comply with a request for an accessible voting station if the request is received not later than the 45th day before the date of the election. (16111)

Added by Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 11, eff. September 1, 2013. (16112)

Sec. 49.112. CANCELLATION OF ELECTION; REMOVAL OF BALLOT MEASURE. (16113)(1-click HTML)

Before the first day of early voting by personal appearance, the board by order or resolution may cancel an election called at the discretion of the district or may remove from the ballot a measure included at the discretion of the district. A copy of the order or resolution must be posted during the period for early voting by personal appearance and on election day at each polling place that is used or that would have been used in the election. (16114)

Added by Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 11, eff. September 1, 2013. (16115)

Sec. 49.113. NOTICE FOR FILING FOR PLACE ON BALLOT. (16116)(1-click HTML)

A notice required by Section 141.040, Election Code, must be posted at the district's administrative office in the district or at the public place established by the district under Section 49.063 of this chapter not later than the 30th day before the deadline for a candidate to file an application for a place on the ballot of a district directors' election. (16117)

Added by Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 11, eff. September 1, 2013. (16118)

SUBCHAPTER E. FISCAL PROVISIONS (16119)(1-click HTML)
Sec. 49.151. EXPENDITURES. (16120)(1-click HTML)

(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. (16121)

(b) The board may by resolution allow the general manager, treasurer, bookkeeper, or other employee of the district to sign disbursements. (16122)

(c) The board may allow disbursements of district money to be transferred by federal reserve wire system or by electronic means. The board by resolution may allow the wire or electronic transfers to accounts in the name of the district or accounts not in the name of the district. (16123)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2001, 77th Leg., ch. 1423, Sec. 8, eff. June 17, 2001. (16124)

Amended by: (16125)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 12, eff. September 1, 2013. (16126)

Sec. 49.152. PURPOSES FOR BORROWING MONEY. (16127)(1-click HTML)

The district may issue bonds, notes, or other obligations to borrow money for any corporate purpose or combination of corporate purposes only in compliance with the methods and procedures provided by this chapter or by other applicable law. (16128)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 11, eff. Sept. 1, 1999. (16129)

Sec. 49.153. REVENUE NOTES. (16130)(1-click HTML)

(a) The board, without the necessity of an election, may borrow money on negotiable or nonnegotiable 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. (16131)

(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. (16132)

(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. (16133)

(d) This section does not apply to special water authorities. (16134)

(e) Subsection (c) does not apply to: (16135)

(1) a note issued to and approved by: (16136)

(A) the Farmers Home Administration; (16137)

(B) the United States Department of Agriculture; (16138)

(C) the Texas Water Development Board; (16139)

(D) the North American Development Bank; or (16140)

(E) a federally chartered instrumentality of the United States authorized under 12 U.S.C. Section 2128(f) to provide financing for water and waste disposal facilities, provided that the district that executes the note is located wholly in a county that: (16141)

(i) does not contain a municipality that has a population of more than 750,000; and (16142)

(ii) is not adjacent to a county described by Subparagraph (i); or (16143)

(2) a district described by Section 49.181(h). (16144)

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; Acts 2003, 78th Leg., ch. 248, Sec. 11, eff. June 18, 2003; Acts 2003, 78th Leg., ch. 608, Sec. 7, eff. June 20, 2003. (16145)

Amended by: (16146)

Acts 2013, 83rd Leg., R.S., Ch. 207 (H.B. 4), Sec. 2.19, eff. September 1, 2013. (16147)

Sec. 49.154. BOND ANTICIPATION NOTES; TAX ANTICIPATION NOTES. (16148)(1-click HTML)

(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 tax anticipation notes or bond anticipation notes to borrow the money needed by the district without advertising or giving notice of the sale. A district's bond anticipation notes or tax anticipation notes are negotiable instruments within the meaning and purposes of the Business & Commerce Code notwithstanding any provision to the contrary in that code. Bond anticipation notes and tax anticipation notes shall mature within one year of their date. (16149)

(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. (16150)

(c) Bond anticipation notes may be issued for any purpose for which bonds of the district may be issued or 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. (16151)

(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. (16152)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16153)

Amended by: (16154)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 13, eff. September 1, 2013. (16155)

Sec. 49.155. PAYMENT OF EXPENSES. (16156)(1-click HTML)

(a) The district may pay out of bond proceeds or other available funds of the district all expenses of the district authorized by this section, including expenses reasonable and necessary to effect the issuance, sale, and delivery of bonds as determined by the board, including, but not limited to, the following: (16157)

(1) interest during construction; (16158)

(2) capitalized interest not to exceed three years' interest; (16159)

(3) reasonable and necessary reserve funds not to exceed two years' interest on the bonds; (16160)

(4) interest on funds advanced to the district; (16161)

(5) financial advisor, bond counsel, attorney, and other consultant fees; (16162)

(6) paying agent, registrar, and escrow agent fees; (16163)

(7) right-of-way acquisition; (16164)

(8) underwriter's discounts or premiums; (16165)

(9) engineering fees, including surveying expenses and plan review fees; (16166)

(10) commission and attorney general fees; (16167)

(11) printing costs; (16168)

(12) all organizational, administrative, and operating costs during creation and construction periods; (16169)

(13) the cost of investigation and making plans, including preliminary plans and associated engineering reports; (16170)

(14) land required for stormwater control; (16171)

(15) costs associated with requirements for federal stormwater permits; and (16172)

(16) costs associated with requirements for endangered species permits. (16173)

(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. (16174)

(c) The district may reimburse any person for money advanced for the purposes in Subsection (a) and may be charged interest on such funds. (16175)

(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. (16176)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 12, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1423, Sec. 9, eff. June 17, 2001. (16177)

Sec. 49.156. DEPOSITORY. (16178)(1-click HTML)

(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. (16179)

(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). (16180)

(c) The board may authorize a designated representative to supervise the substitution of securities pledged to secure the district's funds. (16181)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16182)

Sec. 49.157. INVESTMENTS. (16183)(1-click HTML)

(a) All district deposits and investments shall be governed by Subchapter A, Chapter 2256, Government Code (Public Funds Investment Act). (16184)

(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. (16185)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16186)

Sec. 49.1571. INVESTMENT OFFICER. (16187)(1-click HTML)

(a) Notwithstanding Section 2256.005(f), Government Code, the board may contract with a person to act as investment officer of the district. (16188)

(b) The investment officer of a district shall: (16189)

(1) not later than the first anniversary of the date the officer takes office or assumes the officer's duties, attend a training session of at least six hours of instruction relating to investment responsibilities under Chapter 2256, Government Code; and (16190)

(2) attend at least four hours of additional investment training within each two-year period after the first year. (16191)

(c) Training under this section must be from an independent source approved by: (16192)

(1) the board; or (16193)

(2) a designated investment committee advising the investment officer. (16194)

(d) Training under this section must include education in investment controls, security risks, strategy risks, market risks, diversification of investment portfolio, and compliance with Chapter 2256, Government Code. (16195)

(e) During January of each year, each individual, association, business, organization, governmental entity, or other person that provides training under this section shall report to the comptroller a list of the districts for which the person provided required training under this section during the previous calendar year. An individual's reporting requirements under this subsection are satisfied by a report of the individual's employer or the sponsoring or organizing entity of a training program or seminar. (16196)

Added by Acts 2001, 77th Leg., ch. 69, Sec. 3, eff. May 14, 2001. (16197)

Sec. 49.158. FISCAL YEAR. (16198)(1-click HTML)

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. (16199)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16200)

SUBCHAPTER F. ISSUANCE OF BONDS (16201)(1-click HTML)
Sec. 49.181. AUTHORITY OF COMMISSION OVER ISSUANCE OF DISTRICT BONDS. (16202)(1-click HTML)

(16203)

(a) A district may not issue bonds to finance a project for which the commission has adopted rules requiring review and approval unless the commission determines that the project is feasible and issues an order approving the issuance of the bonds. This section does not apply to: (16204)

(1) refunding bonds if the commission issued an order approving the issuance of the bonds or notes that originally financed the project; (16205)

(2) refunding bonds that are issued by a district under an agreement between the district and a municipality allowing the issuance of the district's bonds to refund bonds issued by the municipality to pay the cost of financing facilities; (16206)

(3) bonds issued to and approved by: (16207)

(A) the Farmers Home Administration; (16208)

(B) the United States Department of Agriculture; (16209)

(C) the North American Development Bank; (16210)

(D) the Texas Water Development Board; or (16211)

(E) a federally chartered instrumentality of the United States authorized under 12 U.S.C. Section 2128(f) to finance such a project, provided that the district that issues the bonds is located wholly in a county that: (16212)

(i) does not contain a municipality that has a population of more than 750,000; and (16213)

(ii) is not adjacent to a county described by Subparagraph (i); (16214)

(4) refunding bonds issued to refund bonds described by Subdivision (3); or (16215)

(5) bonds issued by a public utility agency created under Chapter 572, Local Government Code, any of the public entities participating in which are districts if at least one of those districts is a district described by Subsection (h)(1)(E). (16216)

(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. (16217)

(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. (16218)

(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. (16219)

(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. (16220)

(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. If the commission determines that an application for the approval of bonds complies with the requirements for financial feasibility and the district submitting the application is not required to comply with rules regarding project completion, the commission may not disapprove the issuance of bonds for all or a portion of a project or require that the funding for all or a portion of a project be escrowed solely on the basis that the construction of the project is not complete at the time of the commission's determination. The commission shall retain a copy of the order and send a copy of the order to the district. (16221)

(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. (16222)

(h) This section does not apply to: (16223)

(1) a district if: (16224)

(A) the district's boundaries include one entire county; (16225)

(B) the district was created by a special Act of the legislature and: (16226)

(i) the district is located entirely within one county; (16227)

(ii) the district is located entirely within one or more home-rule municipalities; (16228)

(iii) 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 (16229)

(iv) the district was not required by law to obtain commission approval of its bonds before the effective date of this section; (16230)

(C) the district is a special water authority; (16231)

(D) 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; (16232)

(E) the district on September 1, 2003: (16233)

(i) is a municipal utility district that includes territory in only two counties; (16234)

(ii) has outstanding long-term indebtedness that is rated BBB or better by a nationally recognized rating agency for municipal securities; and (16235)

(iii) has at least 5,000 active water connections; or (16236)

(F) the district: (16237)

(i) is a conservation and reclamation district created under Section 59, Article XVI, Texas Constitution, that includes territory in at least three counties; and (16238)

(ii) has the rights, powers, privileges, and functions applicable to a river authority under Chapter 30; or (16239)

(2) a public utility agency created under Chapter 572, Local Government Code, any of the public entities participating in which are districts if at least one of those districts is a district described by Subdivision (1)(E). (16240)

(i) An application for the approval of bonds under this section may include financing for payment of creation and organization expenses. Expenses are creation and organization expenses if the expenses were incurred through the date of the canvassing of the confirmation election. A commission rule regarding continuous construction periods or the length of time for the payment of expenses during construction periods does not apply to expenses described by this section. (16241)

(j) The commission shall approve an application to issue bonds to finance the costs of spreading and compacting fill to remove property from the 100-year floodplain made by a levee improvement district if the application otherwise meets all applicable requirements for bond applications. (16242)

(k) The commission shall approve an application to issue bonds to finance the costs of spreading and compacting fill to provide drainage that is made by a municipal utility district or a district with the powers of a municipal utility district if the costs are less than the cost of constructing or improving drainage facilities. (16243)

(l) If a district is approved for the issuance of bonds by the commission to use a certain return flow of wastewater, the approval applies to subsequent bond authorizations unless the district seeks approval to use a different return flow of wastewater. (16244)

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; Acts 2003, 78th Leg., ch. 248, Sec. 12, eff. June 18, 2003; Acts 2003, 78th Leg., ch. 608, Sec. 8, eff. June 20, 2003; Acts 2003, 78th Leg., ch. 904, Sec. 1, eff. June 20, 2003. (16245)

Amended by: (16246)

Acts 2005, 79th Leg., Ch. 249 (H.B. 828), Sec. 1, eff. May 30, 2005. (16247)

Acts 2011, 82nd Leg., R.S., Ch. 36 (S.B. 914), Sec. 1, eff. May 9, 2011. (16248)

Acts 2011, 82nd Leg., R.S., Ch. 156 (H.B. 1901), Sec. 1, eff. May 28, 2011. (16249)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 14, eff. September 1, 2013. (16250)

Acts 2013, 83rd Leg., R.S., Ch. 161 (S.B. 1093), Sec. 21.004, eff. September 1, 2013. (16251)

Acts 2013, 83rd Leg., R.S., Ch. 207 (H.B. 4), Sec. 2.20, eff. September 1, 2013. (16252)

Acts 2017, 85th Leg., R.S., Ch. 965 (S.B. 2014), Sec. 1, eff. September 1, 2017. (16253)

Sec. 49.182. COMMISSION SUPERVISION OF PROJECTS AND IMPROVEMENTS. (16254)(1-click HTML)

(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. (16255)

(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. (16256)

(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. (16257)

(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. (16258)

(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. (16259)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16260)

Sec. 49.183. BOND SALES. (16261)(1-click HTML)

(a) Except for refunding bonds, or bonds sold to a state or federal agency or to the North American Development Bank, 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. (16262)

(b) Except for refunding bonds, or bonds sold to a state or federal agency or to the North American Development Bank, before any bonds are sold by a district, the board shall publish an appropriate notice of the sale: (16263)

(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 (16264)

(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. (16265)

(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. (16266)

(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 Chapters 1201, 1204, and 1371, Government Code, and Subchapters A-C, Chapter 1207, Government Code. Except for this subsection, this section does not apply to special water authorities or districts described in Section 49.181(h)(1)(D). (16267)

(e) Subsections (a) and (b) do not apply to district bonds issued pursuant to Chapter 1371, Government Code. (16268)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.421, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1423, Sec. 10, eff. June 17, 2001; Acts 2003, 78th Leg., ch. 248, Sec. 13, eff. June 18, 2003; Acts 2003, 78th Leg., ch. 608, Sec. 9, eff. June 20, 2003. (16269)

Amended by: (16270)

Acts 2011, 82nd Leg., R.S., Ch. 156 (H.B. 1901), Sec. 3, eff. May 28, 2011. (16271)

Sec. 49.184. APPROVAL OF BONDS BY ATTORNEY GENERAL; REGISTRATION OF BONDS. (16272)(1-click HTML)

(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. (16273)

(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. (16274)

(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. (16275)

(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. (16276)

(e) A contract or lease in which the proceeds of the contract or lease are pledged to the payment of a bond 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. A contract or lease, other than a contract or lease in which the proceeds of the contract or lease are pledged to the payment of a bond, may be submitted to the attorney general along with the bond records, and, if reviewed and approved by the attorney general, the approval of the bonds shall constitute an approval of the contract or lease and the contract or lease shall be incontestable. (16277)

(f) In any proceeding concerning the validity of the creation of a district or the annexation of property by a district, a certificate of ownership as certified by the central appraisal district of the county or counties in which the property is located creates a presumption of ownership, and additional proof of ownership is not required unless there is substantial evidence in the official deed records of the county in which the property is located to rebut the presumption. On request by a district, the central appraisal district of the county or counties in which the district is located shall furnish certificates of ownership and may charge reasonable fees to recover the actual costs incurred in preparing the certificates. (16278)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2001, 77th Leg., ch. 1423, Sec. 11, eff. June 17, 2001. (16279)

Amended by: (16280)

Acts 2017, 85th Leg., R.S., Ch. 352 (H.B. 1946), Sec. 1, eff. September 1, 2017. (16281)

Sec. 49.185. EXEMPTIONS. (16282)(1-click HTML)

This subchapter shall not apply to districts engaged in the distribution and sale of electric energy to the public. (16283)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16284)

Sec. 49.186. AUTHORIZED INVESTMENTS; SECURITY FOR FUNDS. (16285)(1-click HTML)

(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. (16286)

(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. (16287)

Added by Acts 1997, 75th Leg., ch. 1070, Sec. 9, eff. Sept. 1, 1997. (16288)

SUBCHAPTER G. AUDIT OF DISTRICTS (16289)(1-click HTML)
Sec. 49.191. DUTY TO AUDIT. (16290)(1-click HTML)

(a) The board shall have the district's fiscal accounts and records audited annually at the expense of the district. (16291)

(b) In all areas of conflict, the provisions of this subchapter shall take precedence over all prior statutory enactments. (16292)

(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. (16293)

(d) The audit required by this section shall be completed within 120 days after the close of the district's fiscal year. (16294)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16295)

Sec. 49.192. FORM OF AUDIT. (16296)(1-click HTML)

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. (16297)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16298)

Sec. 49.193. FINANCIAL REPORTS. (16299)(1-click HTML)

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. (16300)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16301)

Sec. 49.194. FILING OF AUDITS, AFFIDAVITS, AND FINANCIAL REPORTS. (16302)(1-click HTML)

(a) Except as provided by Subsection (h), after the board has approved the audit report, 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. (16303)

(b) Except as provided by Subsection (h), 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. (16304)

(c) Copies of the audit report, 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. (16305)

(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. (16306)

(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. (16307)

(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. (16308)

(g) A submission to the executive director required by this section may be made electronically. (16309)

(h) A special water authority shall submit a copy of the audit report to the executive director for filing not later than the 160th day after the date the special water authority's fiscal year ends. (16310)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2003, 78th Leg., ch. 248, Sec. 14, eff. June 18, 2003. (16311)

Amended by: (16312)

Acts 2013, 83rd Leg., R.S., Ch. 105 (S.B. 902), Sec. 15, eff. September 1, 2013. (16313)

Sec. 49.195. REVIEW BY EXECUTIVE DIRECTOR. (16314)(1-click HTML)

(a) The executive director may review the audit report of each district. (16315)

(b) Subject to Subsection (f), 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. (16316)

(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. (16317)

(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. (16318)

(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. (16319)

(f) Participation by the state auditor under Subsection (b) is subject to approval by the legislative audit committee for inclusion in the audit plan under Section 321.013(c), Government Code. (16320)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. Amended by Acts 2003, 78th Leg., ch. 785, Sec. 54, eff. Sept. 1, 2003. (16321)

Sec. 49.196. ACCESS TO AND MAINTENANCE OF DISTRICT RECORDS. (16322)(1-click HTML)

(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. (16323)

(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. (16324)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16325)

Sec. 49.197. FINANCIALLY DORMANT DISTRICTS. (16326)(1-click HTML)

(a) A financially dormant district is a district that had: (16327)

(1) $500 or less of receipts from operations, tax assessments, loans, contributions, or any other sources during the calendar year; (16328)

(2) $500 or less of disbursements of funds during the calendar year; (16329)

(3) no bonds or other long-term (more than one year) liabilities outstanding during the calendar year; and (16330)

(4) no cash or investments that exceeded $5,000 at any time during the calendar year. (16331)

(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. (16332)

(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. (16333)

(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. (16334)

(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. (16335)

(f) Districts governed by this section are subject to periodic audits by the executive director. (16336)

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1, 1995. (16337)

Sec. 49.198. AUDIT REPORT EXEMPTION. (16338)(1-click HTML)

(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: (16339)

(1) the district had no bonds or other long-term (more than one year) liabilities outstanding during the fiscal period; (16340)

(2) the district did not have gross receipts from operations, loans, taxes, or contributions in excess of $250,000 during the fiscal period; and (16341)

(3) the district's cash and temporary investments were not in excess of $250,000 during the fiscal period. (16342)

(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. (16343)

(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. (16344)

(d) Districts governed by this section are subject to periodic audits by the executive director. (16345)

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. (16346)

Amended by: (16347)

Acts 2011, 82nd Leg., R.S., Ch. 444 (S.B. 1361), Sec. 1, eff. August 29, 2011. (16348)

Acts 2011, 82nd Leg., R.S., Ch. 1021 (H.B. 2694), Sec. 4.23, eff. September 1, 2011. (16349)

Acts 2011, 82nd Leg., R.S., Ch. 1037 (H.B. 3002), Sec. 1, eff. June 17, 2011. (16350)

Sec. 49.199. POLICIES AND AUDITS OF DISTRICTS. (16351)(1-click HTML)

(a) Subject to the law governing the district, the board shall adopt the following in writing: (16352)

(1) a code of ethics for district directors, officers, employees, and persons who are engaged in handling investments for the district; (16353)

(2) a policy relating to travel expenditures; (16354)

(3) a policy relating to district investments that ensures that: (16355)

(A) purchases and sales of investments are initiated by authorized individuals, conform to investment objectives and regulations, and are properly documented and approved; and (16356)

(B) periodic review is made of district investments to evaluate investment performance and security; (16357)

(4) policies and procedures for selection, monitoring, or review and evaluation of professional services; (16358)

(5) a uniform method of accounting and reporting for industrial development bonds and pollution control bonds that complies with requirements of the commission; and (16359)

  

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