Relating to the creation, powers, duties, and financing of the Wise Regional Water District; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose fees; creating a criminal offense.

89(R) HB 3154 - House Committee Report version - Bill Text

89R21071 ANG-D

By: Hopper, Buckley, Villalobos, Fairly,

H.B. No. 3154

et al.

Substitute the following for H.B. No. 3154:

By: Martinez

C.S.H.B. No. 3154

A BILL TO BE ENTITLED

AN ACT

relating to the creation, powers, duties, and financing of the Wise

Regional Water District; granting a limited power of eminent

domain; providing authority to issue bonds; providing authority to

impose fees; creating a criminal offense.

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

SECTION 1. Subtitle X, Title 6, Special District Local Laws

Code, is amended by adding Chapter 11021 to read as follows:

CHAPTER 11021.

WISE REGIONAL WATER DISTRICT

SUBCHAPTER A.

GENERAL PROVISIONS

Sec. 11021.0101. DEFINITIONS. In this chapter:

(1)

"Basic service area" means the geographic area

inside the corporate limits or boundaries of all participants and

all customers and the areas that are served by those members and

customers.

(2)

"Board" means the board of directors of the

district.

(3)

"Contract member" means a governmental entity that

provides retail utility service in its boundaries, that contracts

with the district not later than the end of the second year after

the effective date of the Act enacting this chapter to preserve the

option to become a participant in the 10-year period following the

effective date of the Act enacting this chapter, and that agrees to

pay an annual pro rata share of the administrative and planning

costs of the district that are unrelated to capital projects to be

financed by the district, provided that the share of administrative

and planning costs may not exceed for a contract member 50 cents per

capita unless otherwise agreed by at least 75 percent of the

contract members having, collectively, at least 75 percent of the

population represented by all the contract members.

(4) "County" means Wise County, Texas.

(5)

"Customer" means a wholesale user of the water or

wastewater services provided by the district that provides retail

utility service in the boundaries of the user.

(6) "District" means the Wise Regional Water District.

(7)

"Participant" means a governmental entity that

provides retail utility service in the entity's boundaries and that

contracts with the district for the construction of and payment for

the water or wastewater projects to be financed by the district.

(8)

"Service area" means that geographic area in the

boundaries of the district.

(9)

"Subdistrict" means a subdistrict authorized to be

created under this chapter.

(10)

“Water district” means a conservation and

reclamation district created under Section 52, Article III, or

Section 59, Article XVI, Texas Constitution.

Sec.

11021.0102.

LEGISLATIVE FINDINGS. (a) The

legislature finds that the creation and establishment of the

district and the creation and establishment of subdistricts in the

district are essential to the accomplishment of the purposes of

Section 59, Article XVI, Texas Constitution.

(b)

The legislature finds that all of the land and other

property included in the boundaries of the district and in the

boundaries of a subdistrict will be benefited by the improvements,

works, and projects that are to be provided by the district and by

subdistricts under the powers conferred on the district and

subdistricts by this chapter, and that the district is created to

serve a public use and benefit and any subdistrict created will

serve a public use and will be for a public purpose.

Sec.

11021.0103.

CREATION. (a) A conservation and

reclamation district is created under Section 59, Article XVI,

Texas Constitution. The district shall be known as the Wise

Regional Water District.

(b)

An election confirming the creation of the district is

not required.

Sec.

11021.0104.

TERRITORY.

(a)

Except as provided by

Subsection (b) and Section 11021.0105, the territory of the

district is coextensive with the territory of the county.

(b)

The territory of the district also includes the entire

area in the boundaries of any participant or contract member, a

portion of whose incorporated limits or boundaries are partially

inside the county as those boundaries existed on the effective date

of the Act enacting this chapter.

Sec.

11021.0105. EXPANSION OF DISTRICT. (a) The territory of

the district may be expanded to include the area within the

boundaries of a municipality or water district outside the county,

if the district and the municipality or water district execute a

contract member's contract or a participating member's contract not

later than the second anniversary of the effective date of the Act

enacting this chapter.

(b)

Approval of a contract member's contract between the

district and the municipality or water district requires a

three-quarters majority vote of the district's board of directors.

Approval of a participating member's contract between the district

and the municipality or water district requires a three-quarters

majority vote of the weighted vote of all directors eligible to

vote.

SUBCHAPTER B.

ADMINISTRATIVE PROVISIONS

Sec.

11021.0201.

BOARD OF DIRECTORS. (a) The district is

governed by a board of directors. A director may not be an elected

official of any governmental entity that has the authority to

appoint a member of the board.

(b)

Directors shall be appointed by the commissioners court

of the county and the governing bodies of the participants and

contract members in the manner provided by Section 11021.0202.

(c)

A director is subject to removal with or without cause

by action of the governing body of the entity that originally

appointed that member.

(d)

The board has exclusive authority to manage the district

under this chapter.

Sec.

11021.02015.

INITIAL BOARD.

(a)

The initial board

shall be appointed as follows:

(1)

the commissioners court of the county shall

appoint one director; and

(2)

each of the following entities shall appoint one

director:

(A) the City of Alvord;

(B) the City of Aurora;

(C) the City of Boyd;

(D) the City of Bridgeport;

(E) the City of Decatur;

(F) the City of Newark;

(G) the City of New Fairview;

(H) the City of Paradise;

(I) the City of Rhome;

(J)

the Walnut Creek Special Utility District;

and

(K) the West Wise Special Utility District.

(b)

The initial directors serve until the date the directors

are appointed under Section 11021.0202.

(c)

This section expires on the second anniversary of the

effective date of the Act enacting this chapter.

Sec.

11021.0202.

COMPOSITION OF BOARD. (a)

Each

participant or contract member shall appoint one member to the

board and the Commissioners Court of Wise County shall appoint one

member to the board.

(b)

An entity that contracts with the district more than

five years after the effective date of the Act enacting this chapter

is entitled to representation on the board only under the rules

established by the board for the admission of board members and

member entities.

For a contract member to which this section

applies, the board may establish rules regarding:

(1)

appointing members to the board by the contract

member;

(2)

voting authority of a board member appointed by

the contract member; and

(3)

for a member appointed by the contract member,

voting weight for that board member appointed by the contract

member.

Sec.

11021.0203.

VOTES OF DIRECTORS. (a) Directors who are

appointed by the participants are entitled to vote on all matters

before the board, including all projects to be considered by the

board in all service areas of the district, regardless of whether

the participant is participating in the project.

(b)

A board vote concerning the authorization of and

financial commitments for capital projects must be determined as

provided by this section.

(c)

Each participant that is receiving or that has

contracted to receive service or capacity, including that service

or capacity to be received as a result of the capital project then

under consideration, has one vote for each four million gallons per

day, or portion of that amount, of service or capacity for which the

participant has contracted with the district. The amount for which

the participant has contracted shall be determined by taking into

account the amount of service or capacity the participant receives

from a water treatment plant, a wastewater treatment plant, or a raw

water supply, or any combination of the preceding.

(d)

Each participant with a population of 50,000 or more is

entitled to one extra vote that may be cast on those matters

requiring a weighted vote.

(e)

Participation in capital projects financed by the

district through the issuance of special facility bonds entitles

that entity to be classified as a participant, but does not entitle

that entity to receive any credit toward the four million gallons

per day of service or capacity standard established in Subsection

(c).

(f)

A director who is appointed by a contract member that is

not a participant is entitled to one vote on all matters before the

board except those matters that require a weighted vote.

(g)

Regardless of the date on which an entity became a

member, the entity is not entitled to a number of weighted votes

that exceeds 25 percent of the weighted votes of all directors

eligible to vote for a capital project.

Sec.

11021.0204.

TERMS OF OFFICE. (a) Except as otherwise

provided by this chapter, directors serve staggered four-year terms

in accordance with the procedures to be adopted by the initial

board.

(b) A director may serve consecutive terms.

Sec.

11021.0205.

DIRECTOR QUALIFICATIONS AND COMPENSATION.

(a) Subject to Subsection (b), a director must be a qualified voter

who resides in the district and must qualify to serve by taking the

oath of office and furnishing evidence of the person's

qualifications to serve on the board consistent with the

requirements of this chapter.

(b)

A director appointed by the commissioners court of the

county under Section 11021.02015 or 11021.0202 must be a qualified

voter who resides in an unincorporated area of the county.

(c)

A director is not entitled to receive compensation for

serving as a director, but may be reimbursed for actual reasonable

expenses necessarily incurred on behalf of the district or in the

discharge of official duties.

Sec.

11021.0206.

EX OFFICIO BOARD MEMBERS. The board may

establish a category of ex officio directors and may provide for the

duties and responsibilities of the ex officio members in bylaws or

rules to be adopted by the board.

Sec.

11021.0207.

BOARD PROCEDURES. (a) The board shall

prepare and adopt bylaws for the district, and shall hold regular,

special, or emergency meetings at times and on days or dates as

specified in those bylaws.

(b)

A majority of the directors constitutes a quorum for the

transaction of district business, and approval of at least a

majority of the directors present at a meeting is necessary for

approval of any matter coming before the board, except in a

situation in which a weighted vote is required. If a weighted vote

is required, a majority of the weighted vote of all directors

eligible to vote is necessary for approval of any matter coming

before the board.

(c)

The board shall provide in its bylaws for the method of

execution for all contracts, the signing of checks, and the

handling of any other matters approved by the board. The board

shall elect new officers annually.

(d)

The board shall designate in the bylaws a regular place

for board meetings.

Sec.

11021.0208.

BOARD OFFICERS. (a) The officers of the

board include the president, one or more vice presidents, a

secretary, and a treasurer.

(b)

The board shall elect a president and any vice president

from among its members.

(c)

The board may appoint a secretary, one or more assistant

secretaries, a treasurer, an assistant treasurer, and other

officers that are necessary. The secretary, assistant secretaries,

treasurer, and assistant treasurer are not required to be members

of the board.

(d)

The president is the chief executive officer of the

district and shall preside over the meetings of the board. A vice

president may perform any duty and exercise any power of the

president when the president is absent or fails, refuses, or is

unable to act.

(e)

The secretary or one of the assistant secretaries is

responsible for keeping the minutes of the meetings of the board and

all official records of the board and may certify the accuracy or

authenticity of any actions, proceedings, minutes, or records of

the board or of the district.

(f)

The duties of the other officers may be prescribed by

the bylaws of the district.

Sec.

11021.0209.

EMPLOYEES.

The board may appoint and

employ any person, firm, corporation, partnership, and other entity

considered necessary to conduct the affairs of the district,

including engineers, attorneys, financial advisors, accountants, a

general manager, and other employees or consultants.

Sec.

11021.0210.

CUSTOMER ADVISORY COUNCIL. (a) The board

shall establish a customer advisory council composed of one

representative from each customer receiving service from the

district.

(b)

The members of the customer advisory council may act as

provided in the bylaws of the district or rules of the board, but

the customer advisory council may not vote on matters coming before

the board.

Sec.

11021.0211.

CONFLICT OF INTEREST. The members of the

board and all other officers of the district are subject to the

conflict of interest provisions of Chapter 572, Government Code, in

the same manner as an elected or appointed officer expressly

subject to that chapter.

SUBCHAPTER C.

POWERS AND DUTIES

Sec.

11021.0301.

GENERAL POWERS AND DUTIES. (a) Subject to

specific provisions of this chapter, the district and the board

have the rights, powers, privileges, authority, and functions

granted by Section 59, Article XVI, Texas Constitution, including

the rights, powers, privileges, authority, and functions conferred

by Chapters 49 and 54, Water Code, relating to municipal utility

districts, together with the additional rights, powers,

privileges, authority, and functions authorized by this chapter.

(b) The district may not levy or collect ad valorem taxes.

(c)

If any general law is in conflict or inconsistent with

this chapter, this chapter prevails.

Sec.

11021.0302.

PLANNING AND ACQUISITION OF WORKS AND

FACILITIES.

The district may plan, lay out, purchase, construct,

acquire, own, operate, maintain, repair, and improve, inside or

outside the territory of the district, any works, improvements,

facilities, plants, equipment, and appliances, including:

(1) any administrative properties and facilities;

(2)

any permits, franchises, licenses, or contract or

property rights; and

(3)

any levees, drains, waterways, lakes, reservoirs,

channels, conduits, sewers, dams, stormwater detention facilities,

or other similar facilities and improvements, whether for

municipal, industrial, agricultural, flood control, or related

purposes, that are necessary, helpful, or incidental to the

exercise of any right, power, privilege, authority, or function

provided by this chapter, including:

(A)

supplying water for municipal, domestic, and

industrial uses, and all other beneficial uses or controls;

(B)

collecting, treating, processing, disposing

of, and controlling all domestic or industrial wastes, whether in

fluid, solid, or composite state;

(C)

gathering, conducting, diverting,

controlling, and treating local stormwater or local harmful

excesses of water in the territory of the district; and

(D)

irrigating and altering land elevations in

the territory of the district where needed.

Sec.

11021.0303.

ACQUISITION OF PROPERTY; EMINENT DOMAIN.

(a) The district may acquire, by purchase or by exercise of the

power of eminent domain, any land, easements, rights-of-way, or

other property or improvements inside or outside the territory of

the district, including land above the probable high water line

around any reservoirs in which the district has an ownership or

operational interest, that are needed or are appropriate to carry

out the powers and functions of the district.

(b)

The district may exercise the power of eminent domain in

the manner and with the privileges, rights, and immunities

available under the laws of this state, including Chapter 21,

Property Code.

(c)

The district may not exercise the power of eminent

domain to acquire:

(1)

any property located in a municipality or water

district located wholly or partly in the county without first

notifying the governing body of the municipality or water district

in whose jurisdiction the subject property is located;

(2)

any property located outside the county to be used

as a water supply reservoir without first notifying the county or

counties in which the reservoir is to be located;

(3)

any property owned by the county, any

municipality, any water district, or any agency or instrumentality

of the county, municipality, or water district; or

(4)

a waterworks system or a wastewater system that is

owned by a municipality, a political subdivision of the state,

private persons, or a nonprofit corporation.

Sec.

11021.0304.

ADDITIONAL GENERAL AUTHORITY. The

district may:

(1)

acquire, construct, improve, maintain, and

operate wholesale water and wastewater systems and treatment works

necessary to provide service to district customers; and

(2)

acquire, construct, improve, and maintain any

water supply, reservoir, or interest in any water supply or

reservoir necessary to fully implement the powers and duties of the

district as provided by this chapter.

Sec.

11021.0305.

PROVIDING SERVICES OUTSIDE DISTRICT. On

approval of the board of directors, the district may elect to

provide water, wastewater, solid waste, or nonhazardous liquid

waste services outside its service area, but the district may not be

compelled to supply those services for use outside its service area

except by order of the state agency that has jurisdiction over those

matters.

Sec.

11021.0306.

RIGHTS OF BASIC SERVICE AREA. The basic

service area has the primary right to water or wastewater treatment

capacity and to water supply in each classification that the

district secures under permit from the state agency that has

jurisdiction.

Sec.

11021.0307.

RIGHTS PROTECTED. (a) This chapter

does

not compel any customer or prospective customer to secure water or

wastewater service from the district, except under contracts

voluntarily executed.

(b)

This chapter

does not alter any outstanding permit,

contract, or other obligation, nor does this chapter

in any manner

impair the rights of any entity to own, operate, maintain, or

otherwise use or control any water, wastewater, solid waste, or

liquid waste system in accordance with the law applicable to that

entity.

Sec.

11021.0308.

DISPOSAL SYSTEMS. (a) The district may

exercise the powers needed to establish, acquire, operate, and

maintain a regional solid waste disposal system and a nonhazardous

liquid waste disposal system.

(b)

The district shall provide the services afforded by a

disposal system to:

(1)

any user as determined by the board if the services

are to be rendered in the basic service area of the district; and

(2)

any customer if the services are to be rendered

outside the basic service area.

Sec.

11021.0309.

WATER QUALITY RULES. (a) The district may

adopt and enforce rules to protect water quality in and flowing to

or from the areas in or surrounding the lakes, reservoirs, and other

sources of water supply owned, operated, or controlled by the

district.

(b)

The rules shall be adopted for the purpose of the

prevention of waste or unauthorized use of water controlled by the

district and of the regulation of privileges on any land,

reservoir, or easement owned or controlled by the district.

(c)

The rules shall be adopted and enforced in accordance

with Subchapter D, Chapter 54, Water Code, and must be consistent

with the applicable rules of any state agency that has jurisdiction

over those sources of water supply.

(d)

Under a contract with a county, municipality, or water

district, the district may adopt and enforce rules applicable in

the boundaries of the county, municipality, or water district and

in other areas under the jurisdiction of the county, municipality,

or water district to:

(1)

preserve and protect the quality and sanitary

condition of all water, sanitary sewage, and stormwater that may

affect a water supply of the county, municipality, or water

district or the district or the waters of the state;

(2)

prevent waste or unauthorized use of water,

sanitary sewage, or stormwater under the jurisdiction of a county,

municipality, or water district or the district; or

(3)

implement water conservation measures and

programs in the district.

(e) Rules adopted under Subsection (d):

(1)

may not exceed the authority of the county,

municipality, or water district;

(2)

must be consistent with and no more stringent than

state or federal requirements;

(3) must conform to the terms of the contract; and

(4)

are not applicable within a municipality or water

district that is not a party to the contract or does not consent to

the rules applying within the municipality or water district.

(f)

The district shall publish once a week for two

consecutive weeks in one or more newspapers with general

circulation in the district a notice of the substance of rules

adopted under Subsection (d) and of any penalties for a violation of

the rules.

(g)

A person may not be charged with an offense under this

section before the fifth day after the date of the second

publication of the notice.

(h)

A person who violates a rule or order adopted by the

board under this section commits an offense.

An offense under this

section is a Class C misdemeanor.

Sec.

11021.0310.

GENERAL CONTRACT AUTHORITY. (a) The

district may enter into contracts with the United States, an agency

of the United States, a municipality, a water district, or another

public or private person considered necessary in the exercise of

the powers and purposes of the district.

(b)

The district may enter into contracts to acquire,

purchase, rent, lease, or operate the water production, water

supply, water filtration or purification, water supply facilities,

or other water or wastewater facilities that are owned or operated

by the contracting person.

(c)

The district may acquire water appropriation permits

and other necessary permits directly from the appropriate agency of

the state or from owners of permits.

(d)

Contracts that require a payment of money by the

district may be made payable from any general or specific source of

funds as determined by the board.

Sec.

11021.0311.

CONTRACTS WITH WATER SUPPLY ENTITIES. (a)

A municipality, water district, public agency, political

subdivision, or any nonprofit water supply corporation doing

business wholly or partly in the district or a subdistrict may enter

into any contract with the district that is considered appropriate

by its governing body.

(b)

The governing body of an entity listed in Subsection (a)

may pledge to the payment of a contract any source of revenue that

may be available to the governing body, including the levy and

collection of ad valorem taxes, if that entity has the authority to

levy and collect those taxes.

(c)

To the extent a governing body pledges to the payment of

the contract money to be derived from its own water system, its

wastewater system, or its combined system, the payments constitute

an operating expense of that system.

Sec.

11021.0312.

REGULATORY POWER OF MUNICIPALITIES. This

chapter

does not exempt the district or a subdistrict or land

located in the district from the terms and provisions of an

applicable ordinance, code, resolution, platting and zoning

requirement, rule, or regulation of a municipality.

Sec.

11021.0313.

CREATION EXPENSES.

The district is

authorized to pay all costs and expenses incurred in the creation

and organization of the district.

SUBCHAPTER D.

FINANCIAL PROVISIONS

Sec.

11021.0401.

RATES AND CHARGES. (a) The district may

establish rates and charges to be assessed against customers of the

district for each service rendered to those customers. The rates

and charges may be established by classes of customers, by project,

or by area of service.

(b)

If revenue bonds or other obligations payable wholly

from revenue are issued, the board shall establish and revise rates

of compensation for water sold and for wastewater or other services

rendered by the district that will be sufficient to pay the expense

of operating and maintaining the facilities of the district, to pay

those bonds and obligations as they mature and the interest as it

accrues, and to maintain the reserve and other funds as provided by

the resolution or order authorizing those bonds or obligations.

Sec.

11021.0402.

CHARGES, FEES, AND RENTALS. (a) The

district may adopt, enforce, and collect all necessary charges,

fees, or rentals for providing district facilities or services and

may require a deposit for any service or facilities furnished. The

district may provide that the deposit bear interest.

(b)

The district may discontinue a facility or service to

prevent an abuse or enforce payment of an unpaid charge, fee, or

rental due the district.

(c)

A municipality, water district, public agency,

political subdivision, or any other entity that contracts with the

district may establish, charge, and collect fees, rates, charges,

rentals, and other amounts for any service or facility provided

under or in connection with a contract with the district, and to

pledge sufficient amounts to make all payments required under the

contract.

Sec.

11021.0403.

DISTRICT AUDIT. The district shall have

the funds and accounts of the district audited by an independent

auditor.

The district shall maintain a copy of any audit performed

under this section in the official records of the district.

Sec.

11021.0404.

BONDS, NOTES, AND OTHER OBLIGATIONS. (a)

The district may issue its revenue bonds, notes, revenue

anticipation notes, bond anticipation notes, short-term

obligations, refunding bonds, or other obligations for any of its

purposes without an election and on those terms the board

determines to be appropriate.

(b)

Obligations issued by the district may be made payable

from all or part of the revenues of the district derived from any

lawful source, including a contract with a customer or user of the

facilities owned or operated by the district under this chapter

or

from the ownership and operation of any waterworks system,

wastewater system, sewer system, solid waste disposal system, or

nonhazardous liquid waste system, or any combination of those

systems. Additionally, those obligations may be paid from and

secured by liens on and pledges of all or part of any of the revenue,

income, or receipts derived by the district from its ownership,

operation, lease, or sale of the property, buildings, structures,

or facilities, including the proceeds or revenues from contracts

with a person, firm, corporation, municipality, water district,

public agency, or other political subdivision or entity.

Sec.

11021.0405.

BOND PROCEDURES. (a) The district's

bonds or other obligations may be issued to mature serially or

otherwise not later than 40 years from their date of issuance, and

provision may be made for the subsequent issuance of additional

parity obligations, or subordinate lien obligations, under terms or

conditions in the resolution authorizing the issuance of the

obligations.

(b)

The obligations are negotiable instruments within the

meaning of Chapter 8, Business & Commerce Code.

(c)

The district's bonds or other obligations shall be

executed and may be made redeemable before maturity, issued in the

form, denominations, and manner, and under the terms, conditions,

and details, and sold in the manner, at the price, and under the

terms provided by the bond resolution.

(d)

The district's bonds and obligations shall bear

interest at rates provided in the resolution authorizing the

issuance of the bonds or other obligations.

(e)

If provided in the authorizing resolution, the proceeds

from the sale of the bonds or other obligations may be used to pay

interest on those bonds or other obligations during the period of

the acquisition or construction of any facilities to be provided

through the issuance of the bonds or other obligations, to pay

expenses of operation and maintenance of facilities, to create a

reserve fund for the payment of the principal of and interest on the

bonds or other obligations, and to create any other funds.

(f)

The proceeds from the sale of bonds or other obligations

may be placed on time deposit or invested to the extent and in the

manner provided by the authorizing resolution.

(g)

The district may pledge all or any part of its revenue,

income, or receipts from fees, rentals, rates, charges, or contract

proceeds or payments to the payment of the district's bonds or other

obligations, including the payment of principal, interest, and any

other amounts required or permitted in connection with the bonds or

other obligations. The pledged fees, rentals, rates, charges,

proceeds, or payments shall be established and collected in amounts

that will be at least sufficient, together with any other pledged

resources, to provide for the payment of expenses in connection

with the bonds or other obligations, and for operation,

maintenance, and other expenses in connection with the facilities

for which the bonds or other obligations were issued.

(h)

The district's bonds and other obligations may be

additionally secured by mortgages or deeds of trust on real

property owned or to be acquired by the district, and by chattel

mortgages or liens on any personal property appurtenant to that

real property. The board may authorize the execution of trust

indentures, mortgages, deeds of trust, or other forms of

encumbrances. Also, the district may pledge to the payment of the

obligations all or any part of any grant, donation, revenue, or

income received or to be received from the United States government

or any other public or private source.

(i)

The district shall issue its bonds and other obligations

in accordance with Chapters 1201 and 1371, Government Code, as

applicable.

Sec.

11021.0406.

DEPOSITORY. (a) The board, by order or

resolution, shall designate one or more banks inside or outside the

district to serve as depository for the district's money.

(b)

Except as specifically provided by this chapter, the

district's money

shall be deposited in the depository bank or

banks.

(c)

The district's money may be invested as provided by law

for the investment of county funds and may be invested in accordance

with Chapter 2256, Government Code.

(d)

The district's money

shall be secured in the manner

provided by law for investment of public funds.

SUBCHAPTER E.

SUBDISTRICTS

Sec.

11021.0501.

CREATION OF SUBDISTRICTS. To provide for

the orderly development of water, wastewater, and other services of

the district in the territory of the district and to prevent

unnecessary duplication of facilities, the district may create

subdistricts.

Sec.

11021.0502.

PETITION. (a) A petition requesting the

creation of a subdistrict in the district may be presented to the

board of the district.

(b)

The petition must be signed by at least 25 persons who

own property in the boundaries of the proposed subdistrict, or the

petition may be submitted by the governing body of a municipality or

water district if accompanied by a resolution of the governing body

authorizing the submission of the petition.

(c) A petition must specify:

(1)

the boundaries

of the proposed subdistrict as

required by the board;

(2)

the general nature of the improvements to be

acquired, constructed, or otherwise implemented in the

subdistrict;

(3)

the necessity and feasibility of those

improvements; and

(4)

the proposed method for funding those

improvements.

(d)

If a subdistrict is proposed in the corporate limits or

extraterritorial jurisdiction of a municipality, the petition

requesting the creation of the subdistrict must be accompanied by

an official action of the governing body of the municipality in

whose jurisdiction the subdistrict is proposed approving the

creation of the subdistrict. If the governing body of the

municipality in whose jurisdiction the subdistrict is proposed

objects to the creation of the subdistrict, the subdistrict may not

be created in the incorporated limits or the extraterritorial

jurisdiction of that municipality.

Sec.

11021.0503.

NOTICE AND HEARING. (a) The board shall

set a date for a hearing on a petition not earlier than the 30th day

and not later than the 90th day after the date

the petition is

presented to the district.

(b)

Notice of the hearing shall be given to each

municipality in whose boundaries or extraterritorial jurisdiction

the proposed subdistrict is to be located.

(c)

A copy of the notice of the hearing also shall be posted

in three public places located in the proposed subdistrict and at

the county courthouse not later than the 14th day before the date

set for the hearing.

(d)

Notice of the hearing shall be published at least one

time in a newspaper of general circulation in the county not later

than the 10th day before the date of the hearing.

Sec.

11021.0504.

APPEARANCE AT AND PROCEDURES FOR HEARING.

An interested person may appear at the hearing for the purpose of

supporting or opposing the creation of the subdistrict. The

hearing shall be conducted in accordance with the procedures

established by the board.

Sec.

11021.0505.

BOARD ORDER. (a) After the public

hearing, the board shall enter an order in the official records of

the district making its findings.

(b)

If the board considers the creation of a subdistrict to

be feasible and practical and finds that the creation of the

proposed subdistrict will be beneficial to the public, will benefit

the residents of and the land included in the proposed subdistrict,

and will contribute to the orderly growth and development of the

regional water and wastewater systems within the district, the

board shall enter an order granting the petition and ordering the

creation of the subdistrict under

Section 11021.0506.

(c)

The board shall include its findings in the order and

shall file the order in the official records of the district.

(d)

The order shall define the boundaries of the

subdistrict, but the board is not required to include in the

subdistrict all of the land described in the petition if the board

in its judgment determines that a modification or change in the

subdistrict is necessary or beneficial to the public.

(e)

If the board finds the subdistrict not to be feasible,

practical, or beneficial, the board shall enter an order dismissing

the petition and the proposed subdistrict may not be created. The

dismissal order does not affect the ability to petition for the

creation of a subdistrict covering the same territory at a later

time.

Sec.

11021.0506.

CONFIRMATION ELECTION REQUIREMENT. If the

board orders the creation of a subdistrict, the subdistrict shall

be created and in existence from and after the date stated in the

order of the district, without the necessity of a confirmation

election in the boundaries of the subdistrict. The subdistrict

does not have the authority to levy or collect ad valorem taxes.

Sec.

11021.0507.

STATUS OF SUBDISTRICTS. (a)

A

subdistrict is a conservation and reclamation district under

Section 59, Article XVI, Texas Constitution, with the powers

granted in that section.

(b)

Except as otherwise provided by this chapter, a

subdistrict has the powers specified in this chapter and the same

powers as the district, including the power of eminent domain, and

is subject to the same limitations.

(c)

A subdistrict may not provide services outside its

boundaries, except that it may provide retail water and sewer

services in its customer service area as certificated by a state

regulatory agency.

Sec.

11021.0508.

SUBDISTRICT GOVERNING BOARD. (a)

A

subdistrict is governed by a board of supervisors consisting of at

least five members, as determined by the district's board at the

time the creation petition is granted.

(b)

The initial board of supervisors shall be appointed by

the district from among the residents of the subdistrict.

(c)

The district shall make the appointments for terms

specified in the order creating the subdistrict but not to exceed

four years.

(d)

The initial supervisors are subject to removal, with or

without cause, by action of the district's board.

(e)

Vacancies on the board of supervisors shall be filled by

the district's board for the unexpired term.

(f)

Except for the initial supervisors and before the

issuance of bonds, notes, or other obligations of the subdistrict,

members of the board of supervisors shall be elected in the manner

provided by Chapter 49, Water Code. The election shall be held on

the first Saturday in May. At the initial election of supervisors,

the supervisors' positions shall be divided by the district's board

into two groups as nearly equal as possible for the purpose of

electing initial supervisors for two-year terms and four-year

terms. Successor supervisors serve four-year terms.

Sec.

11021.0509.

GENERAL POWERS OF SUBDISTRICTS. (a)

A

subdistrict may exercise the powers provided by this chapter and

shall own and manage the affairs, works, and projects of the

subdistrict subject to any contracts with the district.

(b)

The issuance of bonds by the subdistrict is not

effective until the issuance is approved by official action of the

district's board.

Sec.

11021.0510.

SUPERVISORS' COMPENSATION. The members of

the board of supervisors are not entitled to receive compensation

for serving as supervisors but may be reimbursed for actual

reasonable expenses necessarily incurred on behalf of the

subdistrict or in the discharge of their official duties.

Sec.

11021.0511.

STATUS OF SUBDISTRICT. A subdistrict may

only become a participant of the district.

Sec.

11021.0512.

CONVERSION OF WATER SUPPLY CORPORATION TO

A SUBDISTRICT. (a)

On the adoption of a conversion resolution by

the board of directors of any nonprofit water supply corporation

doing business wholly or partly in the territory of the district,

the board may consider the question of converting the nonprofit

water supply corporation to a subdistrict by following the

procedures provided by this subchapter for creation of

subdistricts.

(b)

The resolution required by Subsection (a) shall

include, in addition to the information required by Section

11021.0502, a plan of conversion, including the proposed method for

the transfer of assets and the assumption of debts to the

subdistrict.

Sec.

11021.0513.

MEETINGS OF BOARD OF SUPERVISORS.

The

board of supervisors of a subdistrict shall hold regular, special,

or emergency meetings at the times and on the dates the board

determines.

Sec.

11021.0514.

SUBDISTRICT OFFICE; MEETING PLACE. The

board of supervisors of each subdistrict shall designate a meeting

place in the subdistrict as the regular office and meeting place,

but the regular meeting place may be at the regular meeting place of

the district if approved by order of the district.

Sec.

11021.0515.

TAX EXEMPTION.

(a)

All property owned,

operated, leased, or controlled by the district or a subdistrict is

exempt from taxation.

(b)

District or subdistrict bonds, transactions relating to

the bonds, and profits made in the sale of the bonds are exempt from

state taxation or taxation by a municipality, county, special

district, or other political subdivision of the state.

SECTION 2. (a) The legal notice of the intention to

introduce this Act, setting forth the general substance of this

Act, has been published as provided by law, and the notice and a

copy of this Act have been furnished to all persons, agencies,

officials, or entities to which they are required to be furnished

under Section 59, Article XVI, Texas Constitution, and Chapter 313,

Government Code.

(b) The governor, one of the required recipients, has

submitted the notice and Act to the Texas Commission on

Environmental Quality.

(c) The Texas Commission on Environmental Quality has filed

its recommendations relating to this Act with the governor, the

lieutenant governor, and the speaker of the house of

representatives within the required time.

(d) All requirements of the constitution and laws of this

state and the rules and procedures of the legislature with respect

to the notice, introduction, and passage of this Act are fulfilled

and accomplished.

SECTION 3. Each entity that enters into a contract with the

Wise Regional Water District before the second anniversary of the

effective date of this Act and qualifies to be a participant or

contract member shall appoint one member to the board of directors

of the Wise Regional Water District before the second anniversary

of the effective date of this Act.

SECTION 4. (a) Sections 11021.0303 and 11021.0507(b),

Special District Local Laws Code, as added by Section 1 of this Act,

take effect only if this Act receives a two-thirds vote of all the

members elected to each house.

(b) If this Act does not receive a two-thirds vote of all the

members elected to each house, Subchapter C, Chapter 11021, Special

District Local Laws Code, as added by Section 1 of this Act, is

amended by adding Section 11021.0303 to read as follows:

Sec.

11021.0303.

ACQUISITION OF PROPERTY; NO POWER OF

EMINENT DOMAIN. (a) The district may acquire by purchase any land,

easements, rights-of-way, or other property or improvements inside

or outside the boundaries of the district, including land above the

probable high water line around any reservoirs in which the

district has an ownership or operational interest, that are needed

or are appropriate to carry out the powers and functions of the

district.

(b)

The district may not exercise the power of eminent

domain.

(c) If this Act does not receive a two-thirds vote of all the

members elected to each house, Section 11021.0507, Special District

Local Laws Code, as added by Section 1 of this Act, is amended by

adding Subsection (b) to read as follows:

(b)

Except as otherwise provided by this chapter, a

subdistrict has the powers specified in this chapter and the same

powers as the district and is subject to the same limitations. The

subdistrict may not exercise the power of eminent domain.

(d) This section is not intended to be an expression of a

legislative interpretation of the requirements of Section 17(c),

Article I, Texas Constitution.

SECTION 5. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.