CHAPTER 49. PROVISIONS APPLICABLE TO ALL DISTRICTS
WATER CODE
TITLE 4. GENERAL LAW DISTRICTS
CHAPTER 49. PROVISIONS APPLICABLE TO ALL DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 49.001. DEFINITIONS. (a) As used in this chapter:
(1) "District" means any district or authority created by
authority of either Sections 52(b)(1) and (2), Article III, or
Section 59, Article XVI, Texas Constitution, regardless of how
created. The term "district" shall not include any navigation
district or port authority created under general or special law,
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.
(2) "Commission" means the Texas Natural Resource Conservation
Commission.
(3) "Board" means the governing body of a district.
(4) "Executive director" means the executive director of the
commission.
(5) "Water supply corporation" means a nonprofit water supply or
sewer service corporation created or operating under Chapter 67.
(6) "Director" means either a supervisor or director appointed
or elected to the board.
(7) "Municipal solid waste" has the same meaning assigned by
Section 361.003, Health and Safety Code.
(8) "Special water authority" means a river authority as that
term is defined in Section 30.003, or a district created by a
special Act of the legislature that:
(A) is a provider of water or wastewater service to two or more
municipalities; and
(B) is governed by a board of directors appointed or designated
in whole or in part by the governor, the Texas Water Development
Board, or municipalities within its service area.
(9) "Potable water" means water that has been treated for public
drinking water supply purposes.
(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.
(b) These definitions are for use in this chapter only and have
no effect on any other statute or code unless specifically
referenced by that statute or code.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. 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.
Sec. 49.002. APPLICABILITY. (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.
(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.
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.
Sec. 49.003. PENALTY. A district that fails to comply with the
filing provisions of this code may be subject to a civil penalty
of up to $100 per day for each day the district wilfully
continues to violate these provisions after receipt of written
notice of violation from the executive director by certified
mail, return receipt requested. The state may sue to recover the
penalty.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.004. PENALTY FOR VIOLATION OF DISTRICT RULES. (a) The
board may set reasonable civil penalties for the breach of any
rule of the district that shall not exceed the jurisdiction of a
justice court as provided by Section 27.031, Government Code.
(b) A penalty under this section is in addition to any other
penalty provided by the law of this state and may be enforced by
complaints filed in the appropriate court of jurisdiction in the
county in which the district's principal office or meeting place
is located.
(c) If the district prevails in any suit to enforce its rules,
it may, in the same action, recover reasonable fees for
attorneys, expert witnesses, and other costs incurred by the
district before the court. The amount of the attorney's fees
shall be fixed by the court.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
SUBCHAPTER B. CREATION
Sec. 49.010. ORDER OR ACT CREATING DISTRICT. Within 60 days
after the date a district is created, the district shall file
with the executive director a certified copy of the order or
legislative Act creating the district or authorizing its
creation, unless the district was created by order of the
commission.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.011. NOTICE APPLICABLE TO CREATION OF A DISTRICT BY THE
COMMISSION. (a) On receipt by the commission of all required
documentation associated with an application for creation of a
district by the commission under Chapter 36, 50, 51, 54, 55, 58,
65, or 66, the commission shall issue a notice indicating that
the application is administratively complete.
(b) The commission by rule shall establish a procedure for
public notice and hearing of applications. The rules must require
an applicant to publish the notice issued by the commission under
Subsection (a) once a week for two consecutive weeks in a
newspaper regularly published or circulated in the county where
the district is proposed to be located not later than the 30th
day before the date on which the commission may act on the
application.
(c) The commission may act on an application without holding a
public hearing if a public hearing is not requested by the
commission, the executive director, or an affected person in the
manner prescribed by commission rule during the 30 days following
the final publication of notice under Subsection (b).
(d) If the commission determines that a public hearing is
necessary, the commission shall advise all parties of the time
and place of the hearing. The commission is not required to
provide public notice of a hearing under this section.
Added by Acts 1997, 75th Leg., ch. 1070, Sec. 2, eff. Sept. 1,
1997.
SUBCHAPTER C. ADMINISTRATIVE PROVISIONS
Sec. 49.051. BOARD OF DIRECTORS. A district shall be governed
by its board, the number of which is otherwise provided by law.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.052. DISQUALIFICATION OF DIRECTORS. (a) A person is
disqualified from serving as a member of a board of a district
that includes less than all the territory in at least one county
and which, if located within the corporate area of a city or
cities, includes within its boundaries less than 75 percent of
the incorporated area of the city or cities, if that person:
(1) is related within the third degree of affinity or
consanguinity to a developer of property in the district, any
other member of the board, or the manager, engineer, attorney, or
other person providing professional services to the district;
(2) is an employee of any developer of property in the district
or any director, manager, engineer, attorney, or other person
providing professional services to the district or a developer of
property in the district in connection with the district or
property located in the district;
(3) is a developer of property in the district;
(4) is serving as an attorney, consultant, engineer, manager,
architect, or in some other professional capacity for the
district or a developer of property in the district in connection
with the district or property located in the district;
(5)(A) is a party to a contract with or along with the district
except for the purchase of public services furnished by the
district to the public generally; or
(B) is a party to a contract with or along with a developer of
property in the district relating to the district or to property
within the district, other than a contract limited solely to the
purpose of purchasing or conveying real property in the district
for the purpose of either establishing a permanent residence,
establishing a commercial business within the district, or
qualifying as a director; or
(6) during the term of office, fails to maintain the
qualifications required by law to serve as a director.
(b) Within 60 days after the board determines a relationship or
employment exists which constitutes a disqualification under
Subsection (a), it shall replace the person serving as a member
of the board with a person who would not be disqualified.
(c) Any person who wilfully occupies an office as a member of a
board and exercises the powers and duties of that office when
disqualified under the provisions of Subsection (a) is guilty of
a misdemeanor and, on conviction, shall be fined not less than
$100 nor more than $1,000.
(d) As used in this section, "developer of property in the
district" means any person who owns land located within a
district covered under this section and who has divided or
proposes to divide the land into two or more parts for the
purpose of laying out any subdivision or any tract of land or any
addition to any town or city, or for laying out suburban lots or
building lots, or any lots, streets, alleys, or parks or other
portions intended for public use, or the use of purchasers or
owners of lots fronting thereon or adjacent thereto.
(e) Any rights obtained by any third party through official
action of a board covered by this section are not impaired or
affected by the disqualification under this section of any member
of the board to serve, provided that the third party had no
knowledge at the time the rights were obtained of the fact that
the member of the board was disqualified to serve.
(f) This section shall not apply to special water authorities,
districts described in Section 49.181(h)(4), or a district where
the principal function of the district is to provide irrigation
water to agricultural lands or to provide nonpotable water for
any purpose.
(g) A board by unanimous vote of its remaining members may
remove a board member only if that board member has missed
one-half or more of the regular meetings scheduled during the
prior 12 months. Any board member so removed may file a written
appeal with the commission within 30 days after receiving written
notice of the board action. The commission may reinstate a
removed director if the commission finds that the removal was
unwarranted under the circumstances, including the reasons for
absences, the time and place of the meetings missed, the business
conducted at the meetings missed, and any other facts or
circumstances the commission may deem relevant.
(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.
(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:
(1) the district is located within the boundaries of a
municipality with a population of more than 1.8 million; and
(2) all or a part of the district is located more than five
miles from the downtown city hall of that municipality.
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.
Sec. 49.053. QUORUM. A majority of the membership of the board
constitutes a quorum for any meeting, and a concurrence of a
majority of the entire membership of the board is sufficient for
transacting any business of the district. This section does not
apply to special water authorities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.054. OFFICERS. (a) After a district is created and the
directors have qualified, the board shall meet, elect a
president, vice-president, secretary, and any other officers or
assistant officers as the board may deem necessary, and begin the
discharge of its duties.
(b) After each directors election, the board shall meet and
elect officers.
(c) The president is the chief executive officer of the
district, presides at all meetings of the board, and shall
execute all documents on behalf of the district unless the board
by resolution authorizes the general manager or other employee of
the district to execute a document or documents on behalf of the
district. The vice-president shall act as president in case of
the absence or disability of the president. The secretary is
responsible for seeing that all records and books of the district
are properly kept and may attest the president's signature on
documents.
(d) Repealed by Acts 2003, 78th Leg., ch. 1276, Sec. 18.007.
(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.
(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.
(g) This section does not apply to special water authorities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1259, Sec. 1, eff.
Sept. 1, 1997; 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.
Sec. 49.055. SWORN STATEMENT, BOND, AND OATH OF OFFICE. (a) As
soon as practicable after a director is elected or appointed,
that director shall make the sworn statement prescribed by the
constitution for public office.
(b) As soon as practicable after a director has made the sworn
statement, and before beginning to perform the duties of office,
that director shall take the oath of office prescribed by the
constitution for public officers.
(c) Before beginning to perform the duties of office, each
director shall execute a bond for $10,000 payable to the district
and conditioned on the faithful performance of that director's
duties. All bonds of the directors shall be approved by the board
and paid for by the district.
(d) The sworn statement 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.
(e) This section does not apply to special water authorities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 249, Sec. 2, eff. Aug.
30, 1999.
Sec. 49.056. GENERAL MANAGER. (a) The board may employ or
contract with a person to perform such services as general
manager for the district as the board may from time to time
specify. The board may delegate to the general manager full
authority to manage and operate the affairs of the district
subject only to orders of the board.
(b) The board may delegate to the general manager the authority
to employ all persons necessary for the proper handling of the
business and operation of the district and to determine the
compensation to be paid all employees other than the general
manager.
(c) Except as provided by Section 49.052, a director may be
employed as general manager of the district, but the compensation
of a general manager who also serves as a director shall be
established by the other directors.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.057. MANAGEMENT OF DISTRICT. (a) The board shall be
responsible for the management of all the affairs of the
district. The district shall employ or contract with all persons,
firms, partnerships, corporations, or other entities, public or
private, deemed necessary by the board for the conduct of the
affairs of the district, including, but not limited to,
engineers, attorneys, financial advisors, operators, bookkeepers,
tax assessors and collectors, auditors, and administrative staff.
(b) The board shall adopt an annual budget. All district
employees are employed at the will of the district unless the
district and employee execute a written employment contract.
(c) The board shall set the compensation and terms for
consultants.
(d) In selecting attorneys, engineers, auditors, financial
advisors, or other professional consultants, the district shall
follow the procedures provided in Subchapter A, Chapter 2254,
Government Code (Professional Services Procurement Act).
(e) 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.
(f) The board may pay the premium on surety bonds required of
officials, employees, or consultants of the district out of any
available funds of the district, including proceeds from the sale
of bonds.
(g) The board may adopt bylaws to govern the affairs of the
district to perform its purposes. The board may by resolution
authorize its general manager or other employee to execute
documents on behalf of the district.
(h) The board shall also have the right to purchase all
materials, supplies, equipment, vehicles, and machinery needed by
the district to perform its purposes.
(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.
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.
Amended by:
Acts 2005, 79th Leg., Ch.
868, Sec. 1, eff. June 17, 2005.
Sec. 49.058. CONFLICTS OF INTEREST. A director of a district is
subject to the provisions of Chapter 171, Local Government Code,
relating to the regulation of conflicts of interest of officers
of local governments.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.059. DISQUALIFICATION OF TAX ASSESSOR AND COLLECTOR.
(a) No person may serve as tax assessor and collector of a
district providing potable water or sewer utility services to
household users if that person:
(1) is related within the third degree of affinity or
consanguinity to any developer of property in the district, a
member of the board, or the manager, engineer, or attorney for
the district;
(2) is or was within two years immediately preceding the
assumption of assessment and collection duties with the district
an employee of any developer of property in the district or any
director, manager, engineer, or attorney for the district;
(3) owns an interest in or is employed by any corporation
organized for the purpose of tax assessment and collection
services, a substantial portion of the stock of which is owned by
a developer of property within the district or any director,
manager, engineer, or attorney for the district; or
(4) is directly or through a corporation developing land in the
district or is a director, engineer, or attorney for the
district.
(b) Within 60 days after the board determines a relationship or
employment exists which constitutes a disqualification under
Subsection (a), it shall replace the person serving as tax
assessor and collector with a person who would not be
disqualified.
(c) Any person who wilfully violates the provisions of
Subsection (a) is guilty of a misdemeanor and on conviction shall
be fined not less than $100 nor more than $1,000.
(d) As used in this section, "developer of property in the
district" has the same meaning as in Section 49.052(d).
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.060. FEES OF OFFICE; REIMBURSEMENT. (a) A director is
entitled to receive fees of office of not more than $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.
(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.
(b) Each director is also entitled to receive reimbursement of
actual expenses reasonably and necessarily incurred while
engaging in activities on behalf of the district.
(c) In order to receive fees of office and to receive
reimbursement for expenses, each director shall file with the
district a verified statement showing the number of days actually
spent in the service of the district and a general description of
the duties performed for each day of service.
(d) Repealed by Acts 2003, 78th Leg., ch. 736, Sec. 2.
(e) Section 49.002 notwithstanding, in all areas of conflict the
provisions of this section shall take precedence over all prior
statutory enactments. If the enactment of this section results in
an increase in the fees of office for any district, that
district's fees of office shall not increase unless the board
adopts a resolution authorizing payment of the higher fees.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 695, Sec. 1, eff.
Sept. 1, 1997; 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.
Sec. 49.061. SEAL. The directors shall adopt a seal for the
district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.062. OFFICES AND MEETING PLACES. (a) The board shall
designate from time to time and maintain one or more regular
offices for conducting the business of the district and
maintaining the records of the district. Such offices may be
located either inside or outside the district's boundaries as
determined in the discretion of the board.
(b) The board shall designate one or more places inside or
outside the district for conducting the meetings of the board.
The meeting place may be a private residence or office, provided
that the board, in its order establishing the meeting place,
declares the same to be a public place and invites the public to
attend any meeting of the board. If the board establishes a
meeting place or places outside the district, it shall give
notice of the location or locations by filing a true copy of the
resolution establishing the location or locations of the meeting
place or places with the commission and also by publishing notice
of the location or locations in a newspaper of general
circulation in the district. If the location of any of the
meeting places outside the district is changed, notice of the
change shall be given in the same manner.
(c) After at least 25 qualified electors are residing in a
district, on written request of at least five of those electors,
the board shall designate a meeting place and hold meetings
within the district if it determines that the meeting place used
by the district deprives the residents of a reasonable
opportunity to attend district meetings. On the failure to
designate the location of the meeting place within the district,
five electors may petition the commission to designate a
location. If it determines that the meeting place used by the
district deprives the residents of a reasonable opportunity to
attend district meetings, the commission may designate a meeting
place inside or outside the district which is reasonably
available to the public and require that the meetings be held at
such place. After the next election, the board may designate
different meeting places, including one located outside the
boundaries of the district.
(d) Two or more districts may designate and share offices and
meeting places. This section does not apply to special water
authorities.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.063. NOTICE OF MEETINGS. Notice of meetings of the
board shall be given as set forth in the open meetings law,
Chapter 551, Government Code, except that if a district does not
have a meeting place within the district, the district shall post
notice of its meeting at a public place within the district
specified by the board in a written resolution, rather than at
its administrative office. The board shall specify such public
place to be a bulletin board or other place within the district
which is reasonably available to the public. Neither failure to
provide notice of a regular meeting nor an insubstantial defect
in notice of any meeting shall affect the validity of any action
taken at the meeting.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.064. MEETINGS. The board shall hold such regular and
special meetings as may be necessary for the proper conduct of
the district's business. All meetings shall be conducted in
accordance with the open meetings law, Chapter 551, Government
Code. A meeting of a committee of the board, or a committee
composed of representatives of more than one board, where less
than a quorum of any one board is present is not subject to the
provisions of the open meetings law, Chapter 551, Government
Code.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.065. RECORDS. (a) The board shall keep a complete
account of all its meetings and proceedings and shall preserve
its minutes, contracts, records, notices, accounts, receipts, and
other records in a safe place.
(b) The records of each district are the property of the
district and are subject to the open records law, Chapter 552,
Government Code.
(c) The preservation, microfilming, destruction, or other
disposition of the records of each district is subject to the
requirements of Chapter 201, Local Government Code, and rules
adopted under that chapter.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.066. SUITS. (a) A district may sue and be sued in the
courts of this state in the name of the district by and through
its board. 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.
(b) Any court in the state rendering judgment for debt against a
district may order the board to levy, assess, and collect taxes
or assessments to pay the judgment.
(c) The president or the general manager of any district shall
be the agent of the district on whom process, notice, or demand
required or permitted by law to be served upon the district may
be served.
(d) Except as provided in Subsection (e), no suit may be
instituted in any court of this state contesting:
(1) the validity of the creation and boundaries of a district
created under this code;
(2) any bonds or other obligations created under this code; or
(3) the validity or the authorization of a contract with the
United States by the district.
(e) The matters listed in Subsection (d) may be judicially
inquired into at any time and determined in any suit brought by
the State of Texas through the attorney general. The action shall
be brought on good cause shown, except where otherwise provided
by other provisions of this code or by the Texas Constitution. It
is specifically provided, however, that no such proceeding shall
affect the validity of or security for any bonds or other
obligations theretofore issued by a district if such bonds or
other obligations have been approved by the attorney general as
provided by Section 49.184.
(f) A district or water supply corporation shall not be required
to give bond for appeal, injunction, or costs in any suit to
which it is a party and shall not be required to deposit more
than the amount of any award in any eminent domain proceeding.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 8, eff.
Sept. 1, 1999.
Sec. 49.067. CONTRACTS. (a) A district shall contract, and be
contracted with, in the name of the district.
(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.
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.
Sec. 49.068. CONTRACTS WITH GOVERNMENTAL AGENCIES. (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.
(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.
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.
Sec. 49.069. EMPLOYEE BENEFITS. (a) The board may provide for
and administer retirement, disability, and death compensation
funds for the employees of the district.
(b) The board may establish a public retirement system in
accordance with the provisions of Chapter 810, Government Code.
The board may also provide for a deferred compensation plan
described by Section 457 of the Internal Revenue Code of 1986 (26
U.S.C. Section 457).
(c) The board may include hospitalization and medical benefits
to its employees as part of the compensation paid to the officers
and employees and may adopt any plan, rule, or regulation in
connection with it and amend or change the plan, rule, or
regulation as it may determine.
(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.
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.
Sec. 49.070. WORKERS' COMPENSATION. The board may become a
subscriber under Title 5, Labor Code (Texas Workers' Compensation
Act), with any insurance company authorized to write the policies
in the State of Texas.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.071. DISTRICT NAME CHANGE. (a) On petition by a
district showing reasonable grounds for a name change, the
commission by order may change the name of the district to the
name requested by the district. The new name must be generally
descriptive of the location of the district followed by the type
of district as provided by the title of the chapter of the Water
Code governing the district. If a district is located wholly
within one county that contains more than one district of that
type, the district may be differentiated, if necessary, by adding
to the new name the proper consecutive number. The new name may
not be the same as the name of any other district in the county.
(b) A name change takes effect on the date of issuance of the
commission order making the name change.
(c) Not later than the 30th day after the date of issuance of
the commission order making the name change, the district shall
publish notice of the name change in a newspaper or newspapers of
general circulation in the county or counties in which the
district is located. Within that same period, the district shall
also give notice of the name change by mail to utility customers
or permittees, if any, and, to the extent practicable, to the
holders of bonds, obligations, and other indebtedness of the
district. Failure of the district to comply with this subsection
does not affect the validity of the name change.
(d) A change in the name of a district does not affect bonds,
obligations, or other indebtedness of the district existing
before the name change occurred.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.072. LIMITATION ON FUTURE EMPLOYMENT. (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.
(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.
Added by Acts 2003, 78th Leg., ch. 469, Sec. 1, eff. Sept. 1,
2003.
SUBCHAPTER D. ELECTION PROVISIONS
Sec. 49.101. GENERAL. All elections shall be generally
conducted in accordance with the Election Code except as
otherwise provided for by this code. Write-in candidacies for any
district office shall be governed by Subchapter C, Chapter 146,
Election Code.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.102. CONFIRMATION AND DIRECTOR ELECTION. (a) Before
issuing any bonds or other obligations, an election shall be held
within the boundaries of the proposed district to determine if
the proposed district shall be established and, if the directors
of the district are required by law to be elected, to elect
permanent directors.
(b) Notice of a confirmation or director election shall state
the day and place or places for holding the election, the
propositions to be voted on, and the number of directors to be
voted on.
(c) The ballots for a confirmation election shall be printed to
provide for voting "For District" and "Against District." Ballots
for a directors election shall provide the names of the persons
appointed by the governing body who qualified and are serving as
temporary directors at the time the election is called. The
ballots shall also have blank places after the names of the
temporary directors in which a voter may write the names of other
persons for directors.
(d) Immediately after the confirmation and director election,
the presiding judge shall take returns of the results to the
temporary board. The temporary board shall canvass the returns
and declare the results at the earliest practicable time.
(e) If a majority of the votes cast in the election favor the
creation of the district, then the temporary board shall declare
that the district is created and enter the result in its minutes.
If a majority of the votes cast in the election are against the
creation of the district, the temporary board shall declare that
the district was defeated and enter the result in its minutes. A
copy of the order shall be filed with the commission.
(f) The order canvassing the results of the confirmation
election shall contain a description of the district's boundaries
and shall be filed with the executive director and in the deed
records of the county or counties in which the district is
located.
(g) The temporary board shall also declare the persons receiving
the highest number of votes for directors to have been elected as
permanent directors.
(h) Unless otherwise agreed, the directors shall decide the
initial terms of office by lot, with a simple majority of
directors serving until the second succeeding directors election
and the remaining directors serving until the next directors
election.
(i) 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.
(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.
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.
Sec. 49.103. TERMS OF OFFICE OF DIRECTORS. (a) Except as
provided by Section 49.102, the members of the board of a
district shall serve for four-year terms.
(b) An election shall be held on the uniform election date,
established by the Election Code, in May of each even-numbered
year to elect the appropriate number of directors.
(c) The permanent directors may assign a position number to each
director's office, in which case directors shall thereafter be
elected by position and not at large.
(d) A district may provide for the election of all directors, or
a majority of directors, from single-member districts, which
shall be geographically described within the boundaries of the
district in a manner that is equitable for the electors within
such districts and within the district generally.
(e) Section 49.002 notwithstanding, in all areas of conflict the
provisions of Subsections (a) and (b) shall take precedence over
all prior statutory enactments.
(f) This section does not apply to:
(1) any special law district or authority that is not required
by the law creating the district or authority to elect its
directors by the public; or
(2) a special utility district operating under Chapter 65.
(g) A district may, if required under this section to change the
terms of office of directors to four-year terms or to change the
date on which the district holds a director election, extend the
terms of office of directors serving the district on the
effective date of H.B. No. 2236, Acts of the 75th Legislature,
Regular Session, 1997, to continue the terms until the next
appropriate election date in an even-numbered year. A district
that is required under this section to change the terms of office
of directors to staggered terms may require directors of the
district to draw lots to achieve staggered terms.
(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:
(1) the board or the board's designee is not required to:
(A) post or publish notice of the election;
(B) prepare or print ballots and election materials; or
(C) hold early and regular voting; and
(2) the board shall meet at the earliest practicable time to
declare each unopposed candidate elected to office.
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.
Amended by:
Acts 2005, 79th Leg., Ch.
471, Sec. 5, eff. October 1, 2005.
Sec. 49.104. ALTERNATIVE ELECTION PROCEDURES. (a)
Notwithstanding the provisions and requirements of the Election
Code and general laws, any two or more districts situated in the
same county and in which substantially all of the land is being
or has been developed as part of a single community development
plan and which are served by common water supply and waste
disposal systems may by mutual agreement designate a common
election office and common early and regular polling places
within one or more of the districts, but outside the boundaries
of one or more of the districts, for the conduct of director
election proceedings and early and regular balloting in director
elections. This alternative election procedure may only be used
if the common election office and polling places so designated:
(1) are within buildings open to the public;
(2) are within the boundaries of at least one of the districts;
(3) meet the requirements of the Election Code and general laws
as polling places; and
(4) are located not more than five miles from any portion of the
boundaries of any of the participating districts.
(b) Such districts may also agree on and designate a common
election officer and common early and regular voting officials
for some or all of the director elections to be simultaneously
conducted at a common location, any of whom may be nonelective
employees of one or more of the districts, so long as the early
and regular voting officials are qualified voters within at least
one of the districts.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.105. VACANCIES. (a) Except as otherwise provided in
this code, 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.
(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.
(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 shall 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.
(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 the district, the current
members of the board holding the positions not filled at such
election shall be deemed to have been reelected and shall serve
an additional term of office.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 10, eff.
Sept. 1, 1999.
Sec. 49.106. BOND ELECTIONS. (a) Before an election is held to
authorize the issuance of bonds, other than refunding bonds,
there shall be filed in the office of the district and open to
inspection by the public an engineer's report covering the land,
improvements, facilities, plants, equipment, and appliances to be
purchased or constructed and their estimated cost, together with
maps, plats, profiles, and data fully showing and explaining the
report. The engineer's report is not:
(1) part of the proposition or propositions to be voted on; or
(2) a contract with the voters.
(b) Notice of a bond election shall contain the proposition or
propositions to be voted on, which includes the estimate of the
probable cost of design, construction, purchase, and acquisition
of improvements and additions thereto, and incidental expenses
connected with such improvements and the issuance of bonds.
(c) A bond election may be held on the same day as any other
district election. The bond election may be called by a separate
election order or as a part of any other election order. The
board may submit multiple purposes in a single proposition at an
election.
(d) A bond election may be called as a result of an agreement to
annex additional territory into the district.
(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.
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.
Sec. 49.107. OPERATION AND MAINTENANCE TAX. (a) A district may
levy and collect a tax for operation and maintenance purposes,
including funds for planning, constructing, acquiring,
maintaining, repairing, and operating all necessary land, plants,
works, facilities, improvements, appliances, and equipment of the
district and for paying costs of proper services, engineering and
legal fees, and organization and administrative expenses.
(b) An operation and maintenance tax may not be levied by a
district until it is approved by a majority of the electors
voting at an election held for that purpose. After such a tax has
been authorized by the district's voters, the board shall be
authorized to levy the tax and have it assessed and collected as
other district taxes.
(c) An operation and maintenance tax election may be held at the
same time and in conjunction with any other district election.
The election may be called by a separate election order or as
part of any other election order.
(d) The proposition in an operation and maintenance tax election
may be for a specific maximum rate or for an unlimited rate.
(e) If a district has any surplus operation and maintenance tax
funds that are not needed for the purposes for which they were
collected, the funds may be used for any lawful purpose.
(f) Before a district reimburses a developer of property in the
district, as that term is defined in Section 49.052(d), or its
assigns, from operation and maintenance tax funds, for planning,
constructing, or acquiring facilities, the district shall obtain
approval by the executive director.
(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.
(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.
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.
Sec. 49.108. CONTRACT ELECTIONS. (a) A contract may provide
that the district will make payment under the contract from
proceeds from the sale of notes or bonds, from taxes, or from any
other income of the district or any combination of these.
(b) A district may make payments under a contract from taxes
other than operation and maintenance taxes after the provisions
of the contract have been approved by a majority of the qualified
voters voting at an election held for that purpose. A contract
approved by the qualified voters of a district may contain a
provision stating that the contract may be modified or amended by
the board without voter approval.
(c) A contract election may be held at the same time and in
conjunction with any other district election. The election may be
called by a separate election order or as part of any other
election order.
(d) A contract approved by the voters will constitute an
obligation against the taxing power of the district to the extent
provided in the contract.
(e) A district that is required under Section 49.181 to obtain
approval by the commission of the district's issuance of bonds
must obtain approval by the executive director before the
district enters into an obligation under this section to collect
tax for debt that exceeds three years. This subsection does not
apply to contract taxes that are levied to pay for a district's
share of bonds that have been issued by another district and
approved by the commission or bonds issued by a municipality.
(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.
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.
SUBCHAPTER E. FISCAL PROVISIONS
Sec. 49.151. EXPENDITURES. (a) Except as hereinafter provided,
a district's money may be disbursed only by check, draft, order,
or other instrument that shall be signed by at least a majority
of the directors.
(b) The board may by resolution allow the general manager,
treasurer, bookkeeper, or other employee of the district to sign
disbursements.
(c) The board may allow disbursements of district money to be
transferred by federal reserve wire system. The board by
resolution may allow the wire transfers to accounts in the name
of the district or accounts not in the name of the district.
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.
Sec. 49.152. PURPOSES FOR BORROWING MONEY. 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.
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.
Sec. 49.153. REVENUE NOTES. (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.
(b) The notes may be first or subordinate lien notes within the
discretion of the board, but no obligation may ever be a charge
on the property of the district or on taxes levied or collected
by the district but shall be solely a charge on the revenues
pledged for the payment of the obligation. No part of the
obligation may ever be paid from taxes levied or collected by the
district.
(c) Except as provided by Subsection (e), a district may not
execute a note for a term longer than three years unless the
commission issues an order approving the note.
(d) This section does not apply to special water authorities.
(e) Subsection (c) does not apply to:
(1) a note issued to and approved by the:
(A) Farmers Home Administration;
(B) United States Department of Agriculture;
(C) Texas Water Development Board; or
(D) North American Development Bank; or
(2) a district described by Section 49.181(h).
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 7, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 248, Sec. 11, eff. June
18, 2003; Acts 2003, 78th Leg., ch. 608, Sec. 7, eff. June 20,
2003.
Sec. 49.154. BOND ANTICIPATION NOTES; TAX ANTICIPATION NOTES.
(a) The board may declare an emergency in the matter of funds
not being available to pay principal of and interest on any bonds
of the district payable in whole or in part from taxes or to meet
any other needs of the district and may issue negotiable tax
anticipation notes or negotiable bond anticipation notes to
borrow the money needed by the district without advertising or
giving notice of the sale. Bond anticipation notes and tax
anticipation notes shall mature within one year of their date.
(b) Tax anticipation notes may be issued for any purpose for
which the district is authorized to levy taxes, and tax
anticipation notes shall be secured with the proceeds of taxes to
be levied by the district in the succeeding 12-month period. The
board may covenant with the purchasers of the notes that the
board will levy a sufficient tax to pay the principal of and
interest on the notes and pay the costs of collecting the taxes.
(c) Bond anticipation notes may be issued for any purpose for
which bonds of the district may have previously been voted or may
be issued for the purpose of refunding previously issued bond
anticipation notes. A district may covenant with the purchasers
of the bond anticipation notes that the district will use the
proceeds of sale of any bonds in the process of issuance for the
purpose of refunding the bond anticipation notes, in which case
the board will be required to use the proceeds received from sale
of the bonds in the process of issuance to pay principal,
interest, or redemption price on the bond anticipation notes.
(d) Districts required to seek commission approval of bonds must
have an application for such approval on file with the commission
prior to the issuance of bond anticipation notes.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995.
Sec. 49.155. PAYMENT OF EXPENSES. (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:
(1) interest during construction;
(2) capitalized interest not to exceed three years' interest;
(3) reasonable and necessary reserve funds not to exceed two
years' interest on the bonds;
(4) interest on funds advanced to the district;
(5) financial advisor, bond counsel, attorney, and other
consultant fees;
(6) paying agent, registrar, and escrow agent fees;
(7) right-of-way acquisition;
(8) underwriter's discounts or premiums;
(9) engineering fees, including surveying expenses and plan
review fees;
(10) commission and attorney general fees;
(11) printing costs;
(12) all organizational, administrative, and operating costs
during creation and construction periods;
(13) the cost of investigation and making plans, including
preliminary plans and associated engineering reports;
(14) land required for stormwater control;
(15) costs associated with requirements for federal stormwater
permits; and
(16) costs associated with requirements for endangered species
permits.
(b) For purposes of this section, construction periods shall
mean any periods during which the district is constructing its
facilities or there is construction by third parties of above
ground improvements within the district, but in no event longer
than five years.
(c) The district may reimburse any person for money advanced for
the purposes in Subsection (a) and may be charged interest on
such funds.
(d) These payments may be made from money obtained from the
issuance of notes or the sale of bonds issued by the district or
out of maintenance taxes or other revenues of the district.
Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,
1995. 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.
Sec. 49.156. DEPOSITORY. (a) The board, by order or
resolution, shall designate one or more banks or savings
associations within the state to serve as the depository for the
funds of the district. The board shall not be required to
advertise or solicit bids in selecting its depositories.
(b) To the extent that funds in the depository banks or savings
associations are not insured by the Federal Deposit Insurance
Corporation, they shall be secured in the manner provided by law
for the security of funds by Chapter 2257, Government Code
(Public Funds Collateral Act).
(c) The board may authorize a designated representative to
supervise the substitution of securities pledged to secure the
d