CHAPTER 54. MUNICIPAL UTILITY DISTRICTS

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WATER CODE

TITLE 4. GENERAL LAW DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 54.001. DEFINITIONS. In this chapter:

(1) "District" means a municipal utility district operating

under this chapter.

(2) "Board" means the board of directors of a district.

(3) "Director" means a member of the board of directors of a

district.

(4) "Commission" means the Texas Natural Resource Conservation

Commission.

(5) "Executive director" means the executive director of the

Texas Natural Resource Conservation Commission.

(6) "Public agency" means any city, the United States, the State

of Texas, and any district or authority created under Article

XVI, Section 59, or Article III, Section 52, of the Texas

Constitution, including any river authority, or any other

political subdivision or governmental agency of the United States

or the State of Texas.

(7) "City" means any incorporated city, town, or village of the

State of Texas whether operating under general law or under its

home-rule charter.

(8) "Extraterritorial jurisdiction" means the extraterritorial

jurisdiction of a city as defined in Article I, Chapter 160, Acts

of the 58th Legislature, 1963, as amended (Article 970a, Vernon's

Texas Civil Statutes).

(9) "Sole expense" means the actual cost of the relocation,

raising, rerouting, or changing grade or alteration of

construction and providing comparable replacement without

enhancing the facilities after deducting from it the net salvage

value derived from the old facility.

Added by Acts 1971, 62nd Leg., p. 774, ch. 84, Sec. 1. Amended by

Acts 1981, 67th Leg., p. 961, ch. 367, Sec. 1, eff. June 10,

1981; Acts 1985, 69th Leg., ch. 795, Sec. 1.140, eff. Sept. 1,

1985; Acts 1991, 72nd Leg., 1st C.S., ch. 3, Sec. 1.077, eff.

Aug. 12, 1991.

SUBCHAPTER B. CREATION OR EXPANSION OF DISTRICT; CONVERSION OF

DISTRICT

Sec. 54.011. CREATION OF DISTRICT. A municipal utility district

may be created under and subject to the authority, conditions,

and restrictions of Article XVI, Section 59, of the Texas

Constitution.

Added by Acts 1971, 62nd Leg., p. 774, ch. 84, Sec. 1.

Sec. 54.012. PURPOSES OF A DISTRICT. A district shall be

created for the following purposes:

(1) the control, storage, preservation, and distribution of its

storm water and floodwater, the water of its rivers and streams

for irrigation, power, and all other useful purposes;

(2) the reclamation and irrigation of its arid, semiarid, and

other land needing irrigation;

(3) the reclamation and drainage of its overflowed land and

other land needing drainage;

(4) the conservation and development of its forests, water, and

hydroelectric power;

(5) the navigation of its inland and coastal water;

(6) the control, abatement, and change of any shortage or

harmful excess of water;

(7) the protection, preservation, and restoration of the purity

and sanitary condition of water within the state; and

(8) the preservation of all natural resources of the state.

Added by Acts 1971, 62nd Leg., p. 775, ch. 84, Sec. 1.

Sec. 54.013. COMPOSITION OF DISTRICT. (a) A district may

include the area in all or part of any county or counties

including all or part of any cities and other public agencies.

(b) The land composing a district need not be in one body, but

may consist of separate bodies of land separated by land which is

not included in the district.

Added by Acts 1971, 62nd Leg., p. 775, ch. 84, Sec. 1.

Sec. 54.014. PETITION. When it is proposed to create a

district, a petition requesting creation shall be filed with the

commission. The petition shall be signed by a majority in value

of the holders of title of the land within the proposed district,

as indicated by the tax rolls of the central appraisal district.

If there are more than 50 persons holding title to the land in

the proposed district, as indicated by the tax rolls of the

central appraisal district, the petition is sufficient if it is

signed by 50 holders of title to the land.

Added by Acts 1971, 62nd Leg., p. 775, ch. 84, Sec. 1. Amended by

Acts 2001, 77th Leg., ch. 1423, Sec. 29, eff. June 17, 2001.

Sec. 54.015. CONTENTS OF PETITION. The petition shall:

(1) describe the boundaries of the proposed district by metes

and bounds or by lot and block number, if there is a recorded map

or plat and survey of the area;

(2) state the general nature of the work proposed to be done,

the necessity for the work, and the cost of the project as then

estimated by those filing the petition; and

(3) include a name of the district which shall be generally

descriptive of the locale of the district followed by the words

Municipal Utility District, or if a district is located within

one county, it may be designated "__________ County Municipal

Utility District No. ______." (Insert the name of the county and

proper consecutive number.) The proposed district shall not have

the same name as any other district in the same county.

Added by Acts 1971, 62nd Leg., p. 775, ch. 84, Sec. 1.

Sec. 54.016. CONSENT OF CITY. (a) No land within the corporate

limits of a city or within the extraterritorial jurisdiction of a

city, shall be included in a district unless the city grants its

written consent, by resolution or ordinance, to the inclusion of

the land within the district in accordance with Section 42.042,

Local Government Code, and this section. The request to a city

for its written consent to the creation of a district, shall be

signed by a majority in value of the holders of title of the land

within the proposed district as indicated by the county tax rolls

or, if there are more than 50 persons holding title to the land

in the proposed district as indicated by the county tax rolls,

the request to the city will be sufficient if it is signed by 50

holders of title to the land in the district. A petition for the

written consent of a city to the inclusion of land within a

district shall describe the boundaries of the land to be included

in the district by metes and bounds or by lot and block number,

if there is a recorded map or plat and survey of the area, and

state the general nature of the work proposed to be done, the

necessity for the work, and the cost of the project as then

estimated by those filing the petition. If, at the time a

petition is filed with a city for creation of a district, the

district proposes to connect to a city's water or sewer system or

proposes to contract with a regional water and wastewater

provider which has been designated as such by the commission as

of the date such petition is filed, to which the city has made a

capital contribution for the water and wastewater facilities

serving the area, the proposed district shall be designated as a

"city service district." If such proposed district does not meet

the criteria for a city service district at the time the petition

seeking creation is filed, such district shall be designated as a

"noncity service district." The city's consent shall not place

any restrictions or conditions on the creation of a noncity

service district as defined by Chapter 54 of the Texas Water Code

other than those expressly provided in Subsection (e) of this

section and shall specifically not limit the amounts of the

district's bonds. A city may not require annexation as a consent

to creation of any district. A city shall not refuse to approve a

district bond issue for any reason except that the district is

not in compliance with valid consent requirements applicable to

the district. If a city grants its written consent without the

concurrence of the applicant to the creation of a noncity service

district containing conditions or restrictions that the

petitioning land owner or owners reasonably believe exceed the

city's powers, such land owner or owners may petition the

commission to create the district and to modify the conditions

and restrictions of the city's consent. The commission may

declare any provision of the consent to be null and void.

(b) If the governing body of a city fails or refuses to grant

permission for the inclusion of land within its extraterritorial

jurisdiction in a district within 90 days after receipt of a

written request, a majority of the electors in the area proposed

to be included in the district or the owner or owners of 50

percent or more of the land to be included may petition the

governing body of the city and request the city to make available

to the land the water or sanitary sewer service contemplated to

be provided by the district.

electors or the owner or owners of 50 percent or more of the land

to be included in the district fail to execute a mutually

agreeable contract providing for the water or sanitary sewer

service requested within 120 days after receipt of the petition,

the failure shall constitute authorization for the inclusion of

the land in the district under the provisions of this section.

Authorization for the inclusion of such land within the district

under the provisions of this section shall mean only

authorization to initiate proceedings to include the land within

the district as otherwise provided by this Act.

(d) The provisions of this section relating to the method of

including land in a district without securing the written consent

of a city applies only to land within the extraterritorial

jurisdiction of a city and does not apply to land within the

corporate limits of a city. If the city fails or refuses to grant

permission for the inclusion of land in a district or to execute

a mutually agreeable contract providing for the water or sanitary

sewer service requested within the time limits contained within

Subsection (b) or (c) of this section, the applicant may petition

the commission for creation of the district or inclusion of the

land in a district. The commission shall allow creation or

inclusion of the land in a proposed district upon a finding that

the city either does not have the reasonable ability to serve or

has failed to make a legally binding commitment with sufficient

funds available to provide water and wastewater service adequate

to serve the proposed development at a reasonable cost to the

landowner. The commitment shall provide that construction of the

facilities necessary to serve the land shall be commenced within

two years, and shall be substantially complete within four and

one-half years from the date the petition was filed with the

city. Upon any appeal taken to the district court from the

commission ruling, all parties to the commission hearing shall be

made parties to the appeal. The court shall hear the case within

120 days from the date the appeal is filed. If the case is

continued or appealed to a higher court beyond such 120-day

period, the court shall require the appealing party in the case

of appeal to a higher court or party requesting such continuance

to post a bond or other adequate security in the amount of

damages that may be incurred by any party as a result of such

appeal or delay from the commission action. The amount of the

bond or other security shall be determined by the court after

notice and hearing. Upon final disposition, a court may award

damages, including any damages for delays, attorney's fees, and

costs of court to the prevailing party. Under no circumstances

shall land within the corporate limits of a city be included in a

district without the written consent, by ordinance or resolution,

of the city. The provisions of this section shall apply whether

the land is proposed to be included in the district at the time

of creation of a district or to be included by annexation to a

district. A district shall not allow the owner of a tract to

connect to the district's water or wastewater system unless such

tract is a legally subdivided lot which is part of a recorded

subdivision plat or is otherwise legally exempt from the

subdivision requirements of the applicable governmental

authority.

(e) A city may provide in its written consent to the inclusion

of land in a district, that the district construct all facilities

to serve the land in accordance with plans and specifications

which have been approved by the city. The city may also provide

in its written consent that the city shall have the right to

inspect all facilities being constructed by a district. The

city's consent to the inclusion of land in the district may also

contain restrictions on the terms and provisions of the

district's bonds and notes issued to provide service to the land

and conditions on the sale of the district's bonds and notes if

the restrictions and conditions do not generally render the bonds

and notes of districts in the city's extraterritorial

jurisdiction unmarketable. The city's consent to the inclusion of

land in a district may restrict the purposes for which a district

may issue bonds to the purposes of the purchase, construction,

acquisition, repair, extension and improvement of land,

easements, works, improvements, facilities, plants, equipment and

appliances necessary to:

(1) provide a water supply for municipal uses, domestic uses and

commercial purposes;

(2) collect, transport, process, dispose of and control all

domestic, industrial or communal wastes whether in fluid, solid

or composite state; and

(3) gather, conduct, divert and control local storm water or

other local harmful excesses of water in the district and the

payment of organization expenses, operation expenses during

construction and interest during construction.

(f) A city may provide in its written consent for the inclusion

of land in a district that a contract ("allocation agreement")

between the district and the city be entered into prior to the

first issue of bonds, notes, warrants, or other obligations of

the district. The allocation agreement shall contain the

following provisions:

(1) a method by which the district shall continue to exist

following the annexation of all territory within the district by

the city, if the district is initially located outside the

corporate limits of the city;

(2) an allocation of the taxes or revenues of the district or

the city which will assure that, following the date of the

inclusion of all the district's territory within the corporate

limits of the city, the total annual ad valorem taxes collected

by the city and the district from taxable property within the

district does not exceed an amount greater than the city's ad

valorem tax upon such property;

(3) an allocation of governmental services to be provided by the

city or the district following the date of the inclusion of all

of the district's territory within the corporate limits of the

city;

(4) such other terms and conditions as may be deemed appropriate

by the city.

(g) In addition to all the rights and remedies provided by the

laws of the state in the event a district violates the terms and

provisions of a city's written consent, the city shall be

entitled to injunctive relief or a writ of mandamus issued by a

court of competent jurisdiction restraining, compelling or

requiring the district and its officials to observe and comply

with the terms and provisions prescribed in the city's written

consent to the inclusion of land within the district.

(h) A city with a population of 1.18 million or less may provide

in its written consent for the inclusion of land in a district

that after annexation the city may set rates for water and/or

sewer services for property that was within the territorial

boundary of such district at the time of annexation, which rates

may vary from those for other properties within the city for the

purpose of wholly or partially compensating the city for the

assumption of obligation under this code providing that:

(1) such written consent contains a contract entered into by the

city and the persons petitioning for creation of the district

setting forth the time and/or the conditions of annexation by the

city which annexation shall not occur prior to the installation

of 90 percent of the facilities for which district bonds were

authorized in the written consent; and that

(2) the contract sets forth the basis on which rates are to be

charged for water and/or sewer services following annexation and

the length of time they may vary from those rates charged

elsewhere in the city; and that

(3) the contract may set forth the time, conditions, or lands to

be annexed by the district; and that

(4)(A) Each purchaser of land within a district which has entered

into a contract with a city concerning water and/or sewer rates

as set forth herein shall be furnished by the seller at or prior

to the final closing of the sale and purchase with a separate

written notice, executed and acknowledged by the seller, which

shall contain the following information:

(i) the basis on which the monthly water and/or sewer rate is to

be charged under the contract stated as a percentage of the water

and/or sewer rates of the city;

(ii) the length of time such rates will be in effect;

(iii) the time and/or conditions of annexation by the city

implementing such rates.

The provisions of Sections 49.452(g)-(p) and (s), Water Code, are

herein incorporated by reference thereto, and are applicable to

the separate written notice required by Section 54.016(h)(4).

A suit for damages under the provisions of these referenced

sections must be brought within 90 days after the purchaser

receives his or her first water and/or sewer service charge

following annexation, or the purchaser loses his or her right to

seek damages under this referenced section.

(B) The governing board of any district covered by the

provisions of this subsection shall file with the county clerk in

each of the counties in which all or part of the district is

located a duly affirmed and acknowledged statement which includes

the information required in Section 54.016(h)(4)(A) and a

complete and accurate map or plat showing the boundaries of the

district.

The provisions of Sections 49.455(c)-(j), Water Code, are herein

incorporated by reference thereto.

(i) This subsection applies only to a city with a population of

500,000 or more located in a county with a population of 1.4

million or more in which two or more cities or towns with a

population of 300,000 or more are predominately located. A city

may provide in its written consent to the inclusion of land in a

district that a district water facility that serves land

developed and subdivided into lots of less than one acre must

meet the fire flow requirements to which the city is subject.

(j) A city may supplement its written consent in settlement of a

water rate dispute with a district, and the terms of the

supplement remain in effect after expiration of the written

consent unless the city and the district agree otherwise.

Added by Acts 1971, 62nd Leg., p. 775, ch. 84, Sec. 1. Amended by

Acts 1975, 64th Leg., p. 247, ch. 98, Sec. 1, eff. Sept. 1, 1975;

Acts 1979, 66th Leg., p. 2026, ch. 796, Sec. 1, 4, eff. Aug. 27,

1979; Acts 1987, 70th Leg., ch. 1077, Sec. 9, eff. Sept. 1, 1987;

Acts 1989, 71st Leg., ch. 1, Sec. 3(m), eff. Aug. 28, 1989; Acts

1995, 74th Leg., ch. 76, Sec. 11.326, eff. Sept. 1, 1995; Acts

2001, 77th Leg., ch. 669, Sec. 147, eff. Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1098, Sec. 2, eff. June 15, 2007.

Sec. 54.0161. REVIEW OF CREATION BY COUNTY. (a) If all or part

of a proposed district is to be located outside the

extraterritorial jurisdiction of a city, the commissioners court

of the county in which the district is to be located may review

the petition for creation and other evidence and information

relating to the proposed district that the commissioners consider

necessary. Petitioners for the creation of a district shall

submit to the county commissioners court any relevant information

requested by the commissioners court in the event a review is

done.

(b) In the event of a review, the commissioners court shall

submit to the commission, at least 10 days before the date set

for the hearing on the petition, a written opinion stating

whether or not the county would recommend the creation of the

proposed district and stating any findings, conclusions, and

other information that the commissioners think would assist the

commission in making a final determination on the petition.

commission shall consider the written opinion submitted by the

county commissioners.

Added by Acts 1975, 64th Leg., p. 1293, ch. 485, Sec. 1, eff.

Sept. 1, 1975.

Sec. 54.0162. OPTION OF SELECTION BY DISTRICT COMPOSED OF

NONCONTIGUOUS AREAS LOCATED IN THE EXTRATERRITORIAL JURISDICTION

OF TWO MUNICIPALITIES. (a) A municipal utility district

composed of noncontiguous areas that on January 1, 1995, are

contained in the extraterritorial jurisdiction of two

municipalities may choose, by a resolution of the governing body

of the district, to be wholly contained in the extraterritorial

jurisdiction of one municipality selected by the governing body

of the district if:

(1) both the municipality selected by the district and all parts

of the district are located in the same county;

(2) a majority of the area of the municipality not selected by

the district is in a county other than the county in which the

district is located, and neither county has a population greater

than 2,500,000, according to the last preceding federal census;

(3) the boundary of the municipality selected by the district is

located not more than two miles from any part of the district;

(4) the noncontiguous areas of the district are not, at their

closest point, more than two miles apart;

(5) the district is within a water control and improvement

district; and

(6) a certified copy of the resolution of the governing body of

the district is filed with both municipalities before the

effective date specified in the resolution.

(b) If a municipal utility district selects a municipality under

Subsection (a), another municipal utility district that has a

boundary contiguous to the district that has selected a

municipality under Subsection (a) and has a boundary contiguous

to the selected municipality may choose by resolution of the

governing body of the municipal utility district to be contained

wholly in the extraterritorial jurisdiction of the selected

municipality. A copy of the resolution must be filed in the same

manner as required by Subsection (a)(6).

provisions of Subsection (a) or (b) shall release the area of the

municipal utility district from the municipality's

extraterritorial jurisdiction on the effective date of the

resolution presented to the governing body of the municipality

under Subsection (a) or (b). The released area becomes part of

the extraterritorial jurisdiction of the selected municipality.

The released area is not subject to any ordinance of the

municipality not selected by the district.

(d) This section controls over any other law relating to the

creation, application, or operation of the extraterritorial

jurisdiction of a municipality.

(e) The provisions of this section also apply to a municipal

utility district that:

(1) was created before 1980;

(2) has an area of 700 acres or less; and

(3) is located, in part, within the extraterritorial

jurisdiction of two or more municipalities and, in part, outside

municipal extraterritorial jurisdiction in the unincorporated

area of a county.

(f) A municipal utility district acting under Subsection (e)

shall comply with the notification and selection requirements of

this section. A municipality affected by the decision of a

municipal utility district acting under Subsection (e) shall

comply with the requirements of Subsections (b) and (c).

(g) A municipal utility district described by Subsection (e)

shall notify the affected municipality within 30 calendar days of

notice of intent to annex by that municipality.

Added by Acts 1995, 74th Leg., ch. 784, Sec. 1, eff. June 16,

1995.

Sec. 54.0163. OPTION OF SELECTION OF EXTRATERRITORIAL

JURISDICTION FOR CERTAIN DISTRICTS. (a) The board of a district

that is located in the extraterritorial jurisdictions of more

than one municipality by resolution may select the municipality

that may exercise authority within the district as a whole. The

resolution must state the effective date.

(b) As soon as practicable, the board shall file with each

affected municipality and in the real property records of each

county in which the district is located a certified copy of the

resolution.

contained wholly in the extraterritorial jurisdiction of the

municipality selected by the resolution for all purposes. No

action or approval by a municipality not selected is required.

(d) A board that has made a selection of extraterritorial

jurisdiction under Section 54.0162 may confirm the selection by

the adoption of a resolution under this section. If the selection

under Section 54.0162 is confirmed under this subsection, the

selection is effective from the date of the original selection.

(e) Repealed by Acts 2003, 78th Leg., ch. 248, Sec. 57.

Added by Acts 1997, 75th Leg., ch. 1188, Sec. 1, eff. June 20,

1997. Amended by Acts 2003, 78th Leg., ch. 248, Sec. 57(1), eff.

June 18, 2003.

Sec. 54.0165. ADDITION TO DISTRICT OF LAND IN EXTRATERRITORIAL

JURISDICTION OF MUNICIPALITY. (a) A district may not add land

that is located in the extraterritorial jurisdiction of a

municipality unless the governing body of the municipality gives

its written consent by ordinance or resolution in accordance with

this subsection and Section 54.016. In giving its consent, the

municipality may not place any conditions or other restrictions

on the expansion of the political subdivision other than those

expressly permitted by Section 54.016(e).

(b) The procedures under Section 54.016 governing a

municipality's refusal to consent to the creation of a district

apply to a municipality that refuses to consent to the addition

of land to a district under this section.

district may not unreasonably refuse to enter into a contract for

water or sanitary sewer services with the municipality under

Section 54.016(c).

Added by Acts 2007, 80th Leg., R.S., Ch.

703, Sec. 4, eff. June 15, 2007.

Sec. 54.018. NOTICE AND HEARING ON DISTRICT CREATION. If a

petition is filed under Section 54.014, the commission shall give

notice of an application as required by Section 49.011 and may

conduct a hearing on the application if the commission determines

that a hearing is necessary under Section 49.011.

Added by Acts 1971, 62nd Leg., p. 777, ch. 84, Sec. 1. Amended by

Acts 1997, 75th Leg., ch. 1070, Sec. 27, eff. Sept. 1, 1997.

Sec. 54.020. HEARING. (a) If the commission determines that a

hearing is necessary under Section 49.011, the commission shall

conduct a hearing and accept evidence on the sufficiency of the

petition and whether the project is feasible and practicable and

is necessary and would be a benefit to all or any part of the

land proposed to be included in the district.

(b) The commission shall have jurisdiction to determine all

issues on the sufficiency of the petition and creation of the

district.

commission shall have power to make all incidental orders

necessary with respect to the matters before it.

Added by Acts 1971, 62nd Leg., p. 778, ch. 84, Sec. 1. Amended by

Acts 1997, 75th Leg., ch. 1070, Sec. 28, eff. Sept. 1, 1997.

Sec. 54.021. GRANTING OR REFUSING PETITION. (a) If the

commission finds that the petition conforms to the requirements

of Section 54.015 and that the project is feasible and

practicable and is necessary and would be a benefit to the land

to be included in the district, the commission shall so find by

its order and grant the petition.

(b) In determining if the project is feasible and practicable

and if it is necessary and would be a benefit to the land

included in the district, the commission shall consider:

(1) the availability of comparable service from other systems,

including but not limited to water districts, municipalities, and

regional authorities;

(2) the reasonableness of projected construction costs, tax

rates, and water and sewer rates; and

(3) whether or not the district and its system and subsequent

development within the district will have an unreasonable effect

on the following:

(A) land elevation;

(B) subsidence;

(D) recharge capability of a groundwater source;

(E) natural run-off rates and drainage;

(F) water quality; and

(G) total tax assessments on all land located within a district.

be included in the district will be benefited by the creation of

the district, the commission shall so find and exclude all land

which is not benefited from the proposed district and shall

redefine the proposed district's boundaries accordingly.

(d) If the commission finds that the petition does not conform

to the requirements of Section 54.015 of this code or that the

project is not feasible, practicable, necessary, or a benefit to

the land in the district, the commission shall so find by its

order and deny the petition.

(e) A copy of the order of the commission granting or denying a

petition shall be mailed to each city having extraterritorial

jurisdiction in the county or counties in which the district is

located who requested a hearing under Section 49.011.

Added by Acts 1971, 62nd Leg., p. 778, ch. 84, Sec. 1. Amended by

Acts 1975, 64th Leg., p. 1292, ch. 484, Sec. 1, eff. Sept. 1,

1975; Acts 1997, 75th Leg., ch. 1070, Sec. 29, eff. Sept. 1,

1997.

Sec. 54.022. TEMPORARY DIRECTORS. If the commission grants the

petition, it shall appoint five temporary directors to serve

until permanent directors are elected.

Added by Acts 1971, 62nd Leg., p. 778, ch. 84, Sec. 1.

Sec. 54.023. APPEAL FROM THE ORDER OF THE COMMISSION. Any

person who signed the petition, any city, or any person who

appeared in person or by attorney or agent and offered testimony

for or against the creation of the district, may appeal from the

order of the commission granting or refusing the petition within

30 days after the entry of the order.

Added by Acts 1971, 62nd Leg., p. 778, ch. 84, Sec. 1.

Sec. 54.024. SUPERVISION BY COMMISSION. The rights, powers,

privileges, authority, and functions conferred on a district by

granting of a petition for creation shall be subject to the

continuing right of supervision of the state to be exercised by

and through the commission.

Added by Acts 1971, 62nd Leg., p. 778, ch. 84, Sec. 1. Amended by

Acts 1981, 67th Leg., p. 961, ch. 367, Sec. 1, eff. June 10,

1981; Acts 1985, 69th Leg., ch. 795, Sec. 1.142, eff. Sept. 1,

1985; Acts 1995, 74th Leg., ch. 76, Sec. 11.328, eff. Sept. 1,

1995.

Sec. 54.025. QUALIFICATION OF TEMPORARY DIRECTORS. After a

district has been organized, each temporary director shall

execute a bond in accordance with the provisions of Section

49.055 and shall take the oath of office, and the board shall

meet and organize.

Added by Acts 1971, 62nd Leg., p. 778, ch. 84, Sec. 1. Amended by

Acts 1995, 74th Leg., ch. 715, Sec. 16, eff. Sept. 1, 1995.

Sec. 54.030. CONVERSION OF CERTAIN DISTRICTS INTO DISTRICTS

OPERATING UNDER THIS CHAPTER. (a) Any water improvement

district, water control and improvement district, fresh water

supply district, levee improvement district, irrigation district,

or any other conservation and reclamation district created under

Article XVI, Section 59, of the Texas Constitution, may be

converted to a district operating under this chapter.

(b) The governing body of a district which desires to convert

into a district operating under this chapter shall adopt and

enter in the minutes of the governing body a resolution declaring

that in its judgment, conversion into a municipal utility

district operating under this chapter and under Article XVI,

Section 59, of the Texas Constitution, would serve the best

interest of the district and would be a benefit to the land and

property included in the district. The resolution shall also

request the commission to hold a hearing on the question of the

conversion of the district.

Added by Acts 1971, 62nd Leg., p. 779, ch. 84, Sec. 1. Amended by

Acts 1983, 68th Leg., p. 368, ch. 81, Sec. 9(e), eff. Sept. 1,

1983; Acts 1987, 70th Leg., ch. 399, Sec. 3, eff. Sept. 1, 1987.

Sec. 54.031. ESTABLISHING DATE FOR HEARING. When the resolution

requesting conversion is filed, the commission, or someone

authorized by the commission, shall fix a date, time, and place

when the conversion hearing will be held.

Added by Acts 1971, 62nd Leg., p. 780, ch. 84, Sec. 1.

Sec. 54.032. CONVERSION OF DISTRICT: NOTICE. (a) Notice of the

conversion hearing shall be given by publishing notice in a

newspaper with general circulation in the county or counties in

which the district is located.

(b) The notice shall be published once a week for two

consecutive weeks with the first publication to be made not less

than 14 full days before the time set for the hearing.

(1) state the time and place of the hearing;

(2) set out the resolution adopted by the district in full; and

(3) notify all interested persons to appear and offer testimony

for or against the proposal contained in the resolution.

Added by Acts 1971, 62nd Leg., p. 780, ch. 84, Sec. 1.

Sec. 54.033. CONVERSION OF DISTRICT; FINDINGS. (a) After a

hearing, if the commission finds that conversion of the district

into one operating under this chapter would serve the best

interest of the district and would be a benefit to the land and

property included in the district, it shall enter an order making

this finding and the district shall become a district operating

under this chapter and no confirmation election shall be

required.

(b) If the commission finds that the conversion of the district

would not serve the best interest of the district and would not

be a benefit to the land and property included in the district,

it shall enter an order against conversion of the district into

one operating under this chapter.

shall be subject to appeal or review within 30 days after entry

of the order of the commission granting or denying the

conversion.

(d) A copy of the commission order converting a district shall

be filed in the deed records of the county or counties in which

the district is located.

Added by Acts 1971, 62nd Leg., p. 780, ch. 84, Sec. 1. Amended by

Acts 1981, 67th Leg., p. 981, ch. 367, Sec. 23, eff. June 10,

1981.

Sec. 54.034. EFFECT OF CONVERSION. A district which is

converted into a district operating under this chapter shall:

(1) be constituted a municipal utility district operating under

and governed by this chapter;

(2) be a conservation and reclamation district under the

provisions of Article XVI, Section 59, of the Texas Constitution;

and

(3) have and may exercise all the powers, authority, functions,

duties, and privileges provided in this chapter in the same

manner and to the same extent as if the district had been created

under this chapter.

Added by Acts 1971, 62nd Leg., p. 780, ch. 84, Sec. 1.

Sec. 54.035. RESERVATION OF CERTAIN POWERS FOR CONVERTED

DISTRICTS. (a) Any district after converting into a municipal

utility district may continue to exercise all necessary specific

powers under any specific conditions provided by the chapter of

this code under which the district was operating before

conversion and may retain its original name.

(b) Any district converted into a municipal utility district

shall continue to have the power to issue bonds voted before the

conversion but yet unissued and levy and collect maintenance

taxes, bond taxes, or other taxes which were voted before the

conversion.

commission shall specify in the order the specific provisions of

this code under which the district had been operating which are

to be preserved and made applicable to the operations of the

district after conversion into a district operating under this

chapter and whether a new name will be assigned to the district

or the old name retained.

(d) A reservation of a former power under Subsection (a) of this

section may be made only if this chapter does not make specific

provision concerning a matter necessary to the effectual

operation of the converted district.

(e) In all cases in which this chapter does make specific

provision, this chapter shall, after conversion, control the

operations and procedure of the converted district.

Added by Acts 1971, 62nd Leg., p. 781, ch. 84, Sec. 1.

Sec. 54.036. DIRECTORS TO CONTINUE SERVING. The existing board

of a district converted to a municipal utility district under the

provisions of this chapter shall continue to serve as the board

of the converted district.

Added by Acts 1971, 62nd Leg., p. 781, ch. 84, Sec. 1. Amended by

Acts 1981, 67th Leg., p. 961, ch. 367, Sec. 1, eff. June 10,

1981; Acts 1983, 68th Leg., p. 1105, ch. 250, Sec. 1, eff. Aug.

29, 1983; Acts 1983, 68th Leg., p. 5214, ch. 951, Sec. 6, eff.

Jan. 1, 1984; Acts 1995, 74th Leg., ch. 715, Sec. 17, eff. Sept.

1, 1995.

Sec. 54.037. REGIONAL PLAN IMPLEMENTATION AGENCIES. (a) This

section applies only to regional plan implementation agencies,

referred to in this section as agency, created as provided below.

An agency may only be created in connection with regional

planning efforts, and only then when requested by a city. The

purpose of this section is to encourage and promote regional

planning by cities and to facilitate the implementation of

areawide, systematic solutions to water, waste disposal,

drainage, and other problems.

(b) The creation of an agency requires that a special petition

be filed with the commission. The special petition shall:

(1) describe the boundaries of the proposed agency by metes and

bounds or by lot and block number, if there is a recorded map or

plat and survey of the area;

(2) describe the regional planning efforts which are in progress

or completed as of the date of the petition and the anticipated

role of the proposed agency in connection with the implementation

of the regional plan;

(3) include a name of the proposed agency, which must be

generally descriptive of the locale followed by the words

"regional plan implementation agency" and must be different from

the name of any other agency in the same county;

(4) be signed by or on behalf of the owner or owners of the fee

simple title to 50 percent or more of the surface of the land

within the boundaries of the proposed agency, as of the date of

the petition, as indicated by the county tax rolls or other title

data acceptable to the commission;

(5) be approved by the governing body of each city having

extraterritorial jurisdiction over land within the boundaries of

the proposed agency as of the date of the petition, by motion,

resolution, or ordinance which certifies that:

(A) the regional planning efforts described in the petition are

approved by the city;

(B) in the opinion of the governing body, the creation of the

proposed agency would assist in the implementation of such

regional plan; and

proposed agency; and

(6) be endorsed by an officer of each such city to indicate that

the petition has been so approved by the governing body.

as for any ordinary district. After the petition is filed, the

standards and procedures for commission review and action are the

same as for any ordinary district, except that:

(1) the commission must consider the scope of the regional plan

in connection with its findings; and

(2) the requirements for the special petition, above, shall

apply in lieu of the requirements for ordinary districts set out

in Section 54.014, 54.015, 54.016, or other sections of this

code.

(d) The application of an agency for approval of a bond issue

must include an agreement between the agency and each city having

extraterritorial jurisdiction over land within the agency as of

the date of the application. The agreement must identify those

facilities which are proposed to be financed from the proceeds of

the bond issue in question. It must also identify which of those

facilities are part of the regional plan and which are not part

of the plan. Those which are part of the regional plan:

(1) may be larger than would otherwise be necessary to serve

just the needs of the agency; and

(2) may be constructed by, conveyed to, or otherwise acquired by

the city, subject to the terms of such agreement. Those

facilities which are not part of the regional plan and are to be

financed by the agency must be agreed upon by the city and the

agency as being consistent with the regional plan.

(e) An agency may acquire any land, easements, or other

property, real or personal, within or without the agency, for any

purpose or function permitted to a district and may elect to

condemn either the fee simple title or an easement only. Section

54.212(a) of this code does not apply to an agency. If the mode

and manner for condemnation of any type of property is not

otherwise prescribed by law, the Texas Water Development Board

may prescribe the same by rule.

(f) An agency is a district subject to all provisions of this

chapter and other laws relating to districts, except that the

special provisions of this section shall take precedence over

differing or conflicting provisions elsewhere.

(g) Nothing in this Act waives the requirements of this chapter

or other applicable laws relating to voter approval of bond

issues.

Added by Acts 1985, 69th Leg., ch. 939, Sec. 1, eff. Aug. 26,

1985. Amended by Acts 1987, 70th Leg., ch. 399, Sec. 4, eff.

Sept. 1, 1987.

SUBCHAPTER C. ADMINISTRATIVE PROVISIONS

Sec. 54.101. BOARD OF DIRECTORS. A district shall be governed

by a board of five directors.

Added by Acts 1971, 62nd Leg., p. 781, ch. 84, Sec. 1.

Sec. 54.102. QUALIFICATIONS FOR DIRECTORS. To be qualified to

serve as a director, a person shall be at least 18 years old, a

resident citizen of the State of Texas, and either own land

subject to taxation in the district or be a qualified voter

within the district.

Added by Acts 1971, 62nd Leg., p. 781, ch. 84, Sec. 1. Amended by

Acts 1997, 75th Leg., ch. 1070, Sec. 30, eff. Sept. 1, 1997.

Sec. 54.103. LIMITATION ON FILLING VACANCIES. A board may not

appoint a person to fill a vacancy on the board if the person:

(1) resigned from the board:

(A) in the two years preceding the vacancy date; or

(B) on or after the vacancy date but before the vacancy is

filled; or

(2) was defeated in a directors election held by the district in

the two years preceding the vacancy date.

Added by Acts 2005, 79th Leg., Ch.

33, Sec. 1, eff. May 9, 2005.

SUBCHAPTER D. POWERS AND DUTIES

Sec. 54.201. POWERS. (a) A district shall have the functions,

powers, authority, rights, and duties which will permit

accomplishment of the purposes for which it was created.

(b) A district is authorized to purchase, construct, acquire,

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

outside its boundaries any and all works, improvements,

facilities, plants, equipment, and appliances necessary to

accomplish the purposes of the district authorized by the

constitution, this code, or other law, including all works,

improvements, facilities, plants, equipment, and appliances

incident, helpful, or necessary to:

(1) supply water for municipal uses, domestic uses, power, and

commercial purposes and all other beneficial uses or controls;

(2) collect, transport, process, dispose of, and control all

domestic, industrial, or communal wastes whether in fluid, solid,

or composite state;

(3) gather, conduct, divert, and control local storm water or

other local harmful excesses of water in a district;

(4) irrigate the land in a district;

(5) alter land elevation in a district where it is needed;

(6) navigate coastal and inland waters of the district; and

(7) provide parks and recreational facilities for the

inhabitants in the district, subject to the provisions of Chapter

49.

Added by Acts 1971, 62nd Leg., p. 786, ch. 84, Sec. 1. Amended by

Acts 1985, 69th Leg., ch. 100, Sec. 2, eff. Sept. 1, 1985; Acts

2003, 78th Leg., ch. 248, Sec. 27, eff. June 18, 2003.

Sec. 54.203. MUNICIPAL SOLID WASTE. A district is authorized to

purchase, construct, acquire, own, operate, maintain, repair,

improve, extend, or establish a municipal solid waste collection

and disposal system, including recycling, inside and outside the

district and make proper charges for it. A district may require

use of such services as a condition for receiving other district

services. A district may enter into an exclusive contract with a

private entity to provide such services to all land and persons

within its boundaries.

Added by Acts 1971, 62nd Leg., p. 787, ch. 84, Sec. 1. Amended by

Acts 1991, 72nd Leg., ch. 820, Sec. 1, eff. Aug. 26, 1991; Acts

1995, 74th Leg., ch. 715, Sec. 18, eff. Sept. 1, 1995.

Sec. 54.205. ADOPTING RULES AND REGULATIONS. A district may

adopt and enforce reasonable rules and regulations to:

(1) secure and maintain safe, sanitary, and adequate plumbing

installations, connections, and appurtenances as subsidiary parts

of its sanitary sewer system;

(2) preserve the sanitary condition of all water controlled by

the district;

(3) prevent waste or the unauthorized use of water controlled by

the district;

(4) regulate privileges on any land or any easement owned or

controlled by the district; and

(5) provide and regulate a safe and adequate freshwater

distribution system.

Added by Acts 1971, 62nd Leg., p. 787, ch. 84, Sec. 1. Amended by

Acts 1981, 67th Leg., p. 3150, ch. 828, Sec. 1, eff. June 17,

1981.

Sec. 54.2051. SERVICE CONNECTIONS TO CERTAIN DWELLING UNITS.

(a) If the tenant of an individually metered dwelling unit

applies to a district for utility service for that unit, the

district may not require that the service be connected in the

name of the landlord or owner of the unit.

(b) This section does not apply to a dwelling unit that is

located in a building that:

(1) contains two or more dwelling units; and

(2) is served by a master meter or demand meter.

one or more rooms:

(1) rented for use as a permanent residence under a single

verbal or written rental agreement; and

(2) served by a utility meter that belongs to the district and

measures service only for that unit.

Added by Acts 1997, 75th Leg., ch. 166, Sec. 8, eff. Sept. 1,

1997.

Sec. 54.2052. PLUMBING CODE. Notwithstanding any other law, a

district is not required to adopt a plumbing code. A district may

adopt and enforce one or more plumbing codes meeting the

standards and requirements of the rules and laws of this state

and may amend any code adopted to conform to local concerns if

the amendment does not substantially vary from rules or laws of

this state. If a municipal regulation conflicts with a district

regulation, the municipal regulation prevails.

Added by Acts 2003, 78th Leg., ch. 248, Sec. 28, eff. June 18,

2003.

Sec. 54.206. EFFECT OF RULES. After the required publication,

rules adopted by the district under Section 54.205 of this code

shall be recognized by the courts as if they were penal

ordinances of a city.

Added by Acts 1971, 62nd Leg., p. 787, ch. 84, Sec. 1.

Sec. 54.207. PUBLICATION OF RULES. (a) The board shall publish

once a week for two consecutive weeks a substantive statement of

the rules and the penalty for their violation in one or more

newspapers with general circulation in the area in which the

district is located.

(b) The substantive statement shall be condensed as far as

possible to intelligently explain the purpose to be accomplished

or the act forbidden by the rules.

the violator to a penalty and that the full text of the rules are

on file in the principal office of the district where they may be

read by any interested person.

(d) Any number of rules may be included in one notice.

Added by Acts 1971, 62nd Leg., p. 787, ch. 84, Sec. 1.

Sec. 54.208. EFFECTIVE DATE OF RULES. The penalty for violation

of a rule is not effective and enforceable until five days after

the publication of the notice. Five days after the publication,

the published rule shall be in effect and ignorance of it is not

a defense to a prosecution for the enforcement of the penalty.

Added by Acts 1971, 62nd Leg., p. 788, ch. 84, Sec. 1.

Sec. 54.209. LIMITATION ON USE OF EMINENT DOMAIN. A district

may not exercise the power of eminent domain outside the district

boundaries to acquire:

(1) a site for a water treatment plant, water storage facility,

wastewater treatment plant, or wastewater disposal plant;

(2) a site for a park, swimming pool, or other recreational

facility except a trail;

(3) a site for a trail on real property designated as a

homestead as defined by Section 41.002, Property Code; or

(4) an exclusive easement through a county regional park.

Added by Acts 2005, 79th Leg., Ch.

271, Sec. 1, eff. June 9, 2005.

Sec. 54.234. ACQUIRING ROAD POWERS. (a) Any district or any

petitioner seeking the creation of a district may petition the

commission to acquire the power under the authority of Article

III, Section 52, Texas Constitution, to design, acquire,

construct, finance, issue bonds for, and convey to this state, a

county, or a municipality for operation and maintenance, a road

described by Subsection (b) or any improvement in aid of the

road.

(b) The road must meet the criteria for a thoroughfare,

arterial, or collector road of:

(1) a county in whose jurisdiction the proposed road project is

located; or

(2) a municipality in whose corporate limits or extraterritorial

jurisdiction the proposed road project is located.

with the commission, the commission shall issue an order either

approving or denying such petition.

(d) If the commission issues an order approving the petition,

the district may undertake a road project if:

(1) the municipality or county that will operate and maintain

the road has approved the plans and specifications of the road

project; or

(2) the Texas Transportation Commission has approved the plans

and specifications of the road project, if the state is to

operate and maintain the road.

(e) Except as provided by Subsection (d), a district is not

required to obtain approval from the Texas Transportation

Commission to acquire, construct, convey, or finance the road

project.

Added by Acts 1985, 69th Leg., ch. 951, Sec. 7, eff. Sept. 1,

1985. Amended by Acts 1995, 74th Leg., ch. 165, Sec. 22(77), eff.

Sept. 1, 1995; Acts 2003, 78th Leg., ch. 248, Sec. 29, eff. June

18, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

777, Sec. 1, eff. June 15, 2007.

Sec. 54.235. AUTHORITY TO CONTRACT. Any district created by

general law or special act of the legislature in existence for at

least 10 years which lies within a county that borders on the

Gulf of Mexico and that has a population of 190,000 and which has

the powers of this chapter and which also has or is authorized to

acquire road utility district powers pursuant to Section 54.234,

of this code, may contract with the county within which it is

located with respect to the ownership, maintenance, and operation

of any facilities or improvements which such district is

authorized or may be authorized to acquire by purchase, gift,

lease, or otherwise, except by condemnation, any and all property

or interests in property, whether real, personal, or mixed,

tangible or intangible, located inside or outside such county,

that are found to be necessary for such improvements or

facilities. Such county may enter into contracts with such

districts as permitted by this section for any term of years not

exceeding 40 for the management and operation of any or all of

such property and interests in property on such terms as the

commissioners court of such county deems appropriate.

Added by Acts 1985, 69th Leg., ch. 951, Sec. 8(a), eff. Sept. 1,

1985.

Sec. 54.2351. CONTRACTS WITH OTHER DISTRICTS OR WATER SUPPLY

CORPORATIONS. (a) In this section, "authorized water district"

means a district created under Section 52(b)(1) or (2), Article

III, or Section 59, Article XVI, Texas Constitution.

(b) A district may enter into a contract with an authorized

water district or a water supply corporation that authorizes the

district to acquire, through the issuance of debt or other means,

and convey to the authorized water district or water supply

corporation all or part of a water supply, treatment, or

distribution system, a sanitary sewage collection or treatment

system, or works or improvements necessary for drainage of land

in the district. The contract may:

(1) permit the district to rehabilitate, repair, maintain,

improve, enlarge, or extend any existing facilities to be

conveyed to the authorized water district or water supply

corporation; or

(2) require the district to pay impact fees or other fees to the

authorized water district or water supply corporation for

capacity or service in facilities of the authorized water

district or water supply corporation.

the authorized water district or water supply corporation to

purchase the water, sewer, or drainage system from the district

through periodic payments to the district in amounts that,

combined with the net income of the district, are sufficient for

the district to pay the principal of and interest on any bonds of

the district. The contract may provide that the payments due

under this subsection:

(1) are payable from and secured by a pledge of all or part of

the revenues of the water, sewer, or drainage system;

(2) are payable from taxes to be imposed by the authorized water

district; or

(3) are payable from a combination of the revenues and taxes

described by Subdivisions (1) and (2).

(d) The contract may authorize the authorized water district or

water supply corporation to operate the water, sewer, or drainage

system conveyed by the district under Subsection (b).

(e) The contract may require the district to make available to

the authorized water district or water supply corporation all or

part of the raw or treated water to be used for the provision of

services within the district.

(f) If the contract provides for the water, sewer, or drainage

system to be conveyed to the authorized water district or water

supply corporation on or after the completion of construction,

the authorized water district or water supply corporation may pay

the district to provide water, sewer, or drainage services to

residents of the authorized water district or customers of the

water supply corporation.

(g) The contract may authorize the district to convey to the

authorized water district or water supply corporation at no cost

a water, sewer, or drainage system and require the authorized

water district or water supply corporation to use all or part of

those systems to provide retail service to customers within the

district in accordance with the laws of this state and any

certificate of convenience and necessity of the authorized water

district or water supply corporation.

(h) A contract under this section must be approved by a majority

vote of the governing bodies of the district and the authorized

water district or water supply corporation. If Section 52,

Article III, or Section 59, Article XVI, Texas Constitution,

requires that qualified voters of the district approve the

imposition of a tax by the district or the authorized water

district, the district or the authorized water district shall

call an election for that purpose.

Added by Acts 2005, 79th Leg., Ch.

962, Sec. 4, eff. June 18, 2005.

Sec. 54.236. STREET OR SECURITY LIGHTING. Subject to the

provisions of this section, a district may purchase, install,

operate, and maintain street lighting or security lighting within

public utility easements or public rights-of-way within the

boundaries of the district. A district may not issue bonds

supported by ad valorem taxes to pay for the purchase,

installation, and maintenance of street or security lighting.

Added by Acts 1991, 72nd Leg., ch. 820, Sec. 2, eff. Aug. 26,

1991. Amended by Acts 2001, 77th Leg., ch. 1423, Sec. 30, eff.

June 17, 2001.

Sec. 54.237. ENFORCEMENT OF REAL PROPERTY RESTRICTIONS. (a) As

used in this section, "restriction" means a limitation on the use

of real property that is established or incorporated in properly

recorded covenants, property restrictions, plats, plans, deeds,

or other instruments affecting real property in a district and

that has not been abandoned, waived, or properly rescinded.

(b) A district may take all actions necessary to enforce a

restriction, including the initiation, defense, or intervention

in litigation or an administrative proceeding to enjoin or abate

the violation of a restriction when, in the reasonable judgment

of the board of directors of the district, enforcement of the

restriction is necessary to sustain taxable property values in

the district.

recover, a district shall be entitled to recover its costs and

reasonable attorney's fees when a district is the prevailing

party in litigation or an administrative proceeding to enforce a

restriction.

Added by Acts 1991, 72nd Leg., ch. 820, Sec. 3, eff. Aug. 26,

1991.

Sec. 54.238. DEFINITIONS. In this subchapter:

(1) "Developer" means a person who owns a tract of land within a

district and who has divided or proposes to divide the tract into

two or more parts to lay out a subdivision of the tract,

including an addition to a municipality, or to lay out suburban,

building, or other lots, and to lay out streets, alleys, squares,

parks, or other parts of the tract intended to be dedicated to

public use or for the use of purchasers or owners of lots

fronting on or adjacent to the streets, alleys, squares, parks,

or other parts.

(2) "Facilities" means improvements constructed by a developer

for a district.

Added by Acts 1993, 73rd Leg., ch. 1036, Sec. 1, eff. Sept. 1,

1993.

Sec. 54.239. APPEAL TO THE COMMISSION OF DECISION OF BOARD

REGARDING FACILITIES. A person aggrieved by a decision of a

board involving the cost, purchase, or use of facilities may

appeal the decision to the commission by filing a petition with

the commission seeking appropriate relief within 30 days after

the date of the decision. The commission may require a petitioner

to include with a petition under this subchapter a deposit in an

amount estimated to be sufficient to pay the costs of notice

under V.T.C.A., Water Code

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Texas Codes and Statutes

CHAPTER 54. MUNICIPAL UTILITY DISTRICTS