By Howard H.B. No. 3194 Line and page numbers may not match official copy. Bill not drafted by TLC or Senate E&E. A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the creation, administration, powers, duties, 1-3 operation, and financing of the Fort Bend County Levee Improvement 1-4 District Number ____ and to the authorization of bonds and the levy 1-5 of taxes; providing civil penalties. 1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-7 ARTICLE 1. GENERAL PROVISIONS 1-8 SECTION 1.01. CREATION. (a) A levee improvement district, 1-9 to be known as Fort Bend County Levee Improvement District Number 1-10 ____, is created. The district is a governmental agency and a body 1-11 politic and corporate. 1-12 (b) The district is created under and is essential to 1-13 accomplish the purposes of Section 59, Article XVI, Texas 1-14 Constitution. 1-15 (c) The district has the powers of a levee improvement 1-16 district as provided by Chapter 57, Water Code, and is governed by 1-17 Chapter 49, Water Code, unless otherwise provided by this Act. 1-18 SECTION 1.02. DEFINITIONS. In this Act: 1-19 (1) "County" means Fort Bend County. 1-20 (2) "District" means the Fort Bend County Levee 1-21 Improvement District Number ____. 1-22 (3) "Board" means the board of directors of the Fort 1-23 Bend County Levee Improvement District Number ____. 2-1 (4) "Commissioners court" means the Fort Bend County 2-2 Commissioners Court. 2-3 SECTION 1.03. BOUNDARIES. (a) Except as provided by 2-4 Subsection (b) of this section, the district includes the territory 2-5 contained within the following area: 2-6 (b) A mistake in the patents or field notes or in copying 2-7 the patents or field notes in the legislative process does not 2-8 affect the organization, existence, or validity of the district, 2-9 the right of the district to issue bonds or refunding bonds or to 2-10 pay the principal of or interest on issued bonds, the right of the 2-11 district to levy and collect taxes, or the legality or operation of 2-12 the district or its governing board. 2-13 ARTICLE 2. ADMINISTRATIVE PROVISIONS 2-14 SECTION 2.01. BOARD. The district shall be governed by and 2-15 all powers of the district shall be exercised by a board of five 2-16 directors. 2-17 SECTION 2.02. DIRECTOR ELIGIBILITY. Except for initial 2-18 directors, a person must meet the requirements of Section 57.059, 2-19 Water Code, to be eligible to serve as a director. A person must 2-20 be at least 18 years of age and a resident of Fort Bend County or 2-21 Travis County to be eligible to serve as an initial director. 2-22 Notwithstanding Section 49.052, Water Code, employment with a state 2-23 agency, other than the Texas Department of Transportation, the 2-24 General Land Office or the School Land Board, does not disqualify a 2-25 person from serving as a director. An employee of the district may 2-26 not serve as a director. 3-1 SECTION 2.03. TERMS OF OFFICE AND APPOINTMENT OF DIRECTORS. 3-2 (a) Except for initial directors, directors serve staggered 3-3 four-year terms, with the terms of two or three directors expiring 3-4 September 1 of each even-numbered year. 3-5 (b) The School Land Board shall appoint five initial 3-6 directors as soon as practicable after the effective date of this 3-7 Act. The School Land Board shall appoint two initial directors to 3-8 serve terms expiring September 1, 2002, and three initial directors 3-9 to serve terms expiring September 1, 2004. If a vacancy occurs, 3-10 the School Land Board shall appoint a successor to fill the vacancy 3-11 and to serve the remainder of the unexpired term. Initial 3-12 directors shall serve until permanent directors are elected under 3-13 Section 2.04 of this Act and qualify for office. 3-14 SECTION 2.04. ELECTION OF PERMANENT DIRECTORS. (a) A 3-15 director serves until the director's successor has qualified. An 3-16 election shall be held for the election of the appropriate number 3-17 of permanent directors on the first Saturday in May of each 3-18 even-numbered year. 3-19 (b) The board shall publish notice of an election under this 3-20 section once a week for two consecutive weeks in a newspaper of 3-21 general circulation in the district beginning not later than 14 3-22 days before the date of the election. 3-23 SECTION 2.05. QUALIFICATION OF DIRECTOR. A director shall 3-24 take the constitutional oath of office and, except for initial 3-25 directors, give bond for the faithful performance of the director's 3-26 duties as required by Section 49.055, Water Code. The cost of a 4-1 bond under this section shall be paid by the district. 4-2 SECTION 2.06. MEETINGS AND BOARD ACTIONS. (a) The board 4-3 may establish regular meetings to conduct the business of the 4-4 district and may hold special meetings if necessary as determined 4-5 by the board. The board shall hold a meeting under this section 4-6 within the district unless the board, by a majority vote at a 4-7 public meeting, decides to hold the meeting outside of the 4-8 district. 4-9 (b) A majority of the directors shall constitute a quorum of 4-10 the board. A vote of a majority of the quorum present is necessary 4-11 to take board action. The board may adopt bylaws to govern the 4-12 affairs of the district and may adopt a seal for the district. The 4-13 board may provide in the bylaws that, except for initial directors, 4-14 a director shall receive compensation of $20 for attending a 4-15 meeting of the board. A director may not be paid more than $40 for 4-16 meetings held in a calendar month. 4-17 SECTION 2.07. ORGANIZATION OF BOARD OF DIRECTORS. The board 4-18 shall elect a president and vice president from members of the 4-19 board. The board may elect other officers as are deemed necessary 4-20 by the board. The president is the chief executive officer of the 4-21 district and the presiding officer of the board and has the same 4-22 right to vote as other members of the board. The vice president 4-23 shall perform the duties and exercise the powers of the president 4-24 if the president is absent, fails to act, or refuses to act. The 4-25 board shall appoint a secretary and treasurer. The secretary and 4-26 treasurer may be, but are not required to be, members of the board. 5-1 One person may serve as both secretary and treasurer. The 5-2 treasurer shall give bond in an amount required by the board. The 5-3 condition of the bond shall be that the treasurer will faithfully 5-4 account for all money that comes into the custody of the treasurer. 5-5 The board shall require a bond under this section of at least 5-6 $100,000 if the district has authorized the issuance of bonds. If 5-7 the district has not authorized the issuance of bonds, the board 5-8 shall require a bond of at least $5,000. 5-9 SECTION 2.08. CONFLICT OF INTEREST: CONTRACT. A director 5-10 who is financially interested in a contract that is proposed to be 5-11 executed by the board for the purchase of property or services or 5-12 for the construction of facilities shall disclose the director's 5-13 interest to the board and may not vote on the acceptance of the 5-14 contract. 5-15 SECTION 2.09. DISTRICT EMPLOYEES. The board is authorized 5-16 to employ a general manager and consulting engineers, financial 5-17 consultants, attorneys, and auditors. The general manager shall be 5-18 responsible for: 5-19 (1) administering the board's directives; 5-20 (2) maintaining district records, including minutes of 5-21 board meetings; 5-22 (3) coordinating with federal, state, and local 5-23 agencies; 5-24 (4) developing plans and programs for the board's 5-25 approval; 5-26 (5) hiring, supervising, training, and discharging the 6-1 district's employees; 6-2 (6) obtaining technical, scientific, legal, fiscal, or 6-3 other professional services for the district; and 6-4 (7) performing other duties as assigned by the board. 6-5 SECTION 2.10. EMPLOYEE BONDS. (a) The general manager and 6-6 each employee of the district who is charged with the collection, 6-7 custody, or payment of district money shall execute a fidelity bond 6-8 in an amount determined by the board and in a form and with a 6-9 surety approved by the board. 6-10 (b) The district shall pay the premium on a bond under this 6-11 section. 6-12 SECTION 2.11. PRINCIPAL OFFICE. (a) If the district has 6-13 not issued bonds, the district may maintain its principal office in 6-14 Fort Bend County or Travis County. If the district maintains its 6-15 principal office in Travis County, the district shall maintain 6-16 duplicates of district records in Fort Bend County and make the 6-17 duplicate records available for inspection during regular business 6-18 hours. 6-19 (b) If the district has issued bonds, the district shall 6-20 maintain its principal office in Fort Bend County. 6-21 SECTION 2.12. RECORDS. (a) The district shall keep at its 6-22 principal office: 6-23 (1) a complete and accurate account of the district's 6-24 business transactions in accordance with generally accepted 6-25 accounting methods; 6-26 (2) a complete and accurate record of the minutes of 7-1 board meetings; and 7-2 (3) contracts, documents, and other records of the 7-3 district. 7-4 (b) The district shall permit reasonable public inspection 7-5 of the district's records during regular business hours. 7-6 SECTION 2.13. SUIT. The district may sue and be sued in the 7-7 district's corporate name. 7-8 ARTICLE 3. AUTHORITY OF DISTRICT 7-9 SECTION 3.01. POWERS AND DUTIES. (a) The district shall: 7-10 (1) administer and enforce the provisions of this Act; 7-11 (2) use the facilities and powers of the district to 7-12 accomplish the purposes of this Act; 7-13 (3) construct and maintain levees and other 7-14 improvements on, along, and contiguous to rivers, creeks and 7-15 streams; 7-16 (4) reclaim lands from overflow from streams; 7-17 (5) control and distribute the waters of rivers and 7-18 streams by straightening and otherwise improving them; and 7-19 (6) provide for the proper drainage and improvement of 7-20 the reclaimed land. 7-21 (b) Except as provided by this Act, the district has the 7-22 powers, rights, and privileges necessary and convenient for 7-23 accomplishing the purposes of this Act as provided by general law 7-24 relating to a levee improvement district created under Section 59, 7-25 Article XVI, Texas Constitution. 7-26 (c) The district may enter into all necessary and proper 8-1 contracts and employ all persons and means necessary to purchase, 8-2 acquire, build, construct, carry out, maintain, protect and in case 8-3 of necessity, add to and rebuild all works and improvements within 8-4 the district necessary or proper to fully accomplish a plan 8-5 lawfully adopted for the district. 8-6 (c) The powers granted to the district by this Act are 8-7 cumulative of powers granted by other law. 8-8 SECTION 3.02. DISTRICT RULES. (a) The district may adopt 8-9 and enforce rules reasonably required to implement this Act, 8-10 including rules governing procedure and practice before the board. 8-11 (b) The district shall keep a record of the district's rules 8-12 and provide a copy of the rules to a person on written request. 8-13 SECTION 3.03. INSPECTIONS AND INVESTIGATIONS. In addition 8-14 to the powers provided by Section 49.221, Water Code, the district 8-15 may enter public or private property located within the district 8-16 for purposes of inspecting and investigating conditions of the 8-17 property relating to the district's authorized purposes. The 8-18 district shall conduct an inspection or investigation in accordance 8-19 with provisions and restrictions applicable to the Texas Natural 8-20 Resource Conservation Commission. 8-21 SECTION 3.04. HEARINGS AND ORDERS. (a) The board may: 8-22 (1) hold hearings, receive evidence from a party in 8-23 interest who appears before the board, compel the attendance of a 8-24 witness, and make findings of fact and determinations relating to 8-25 the administration of this Act or an order or rule of the board; 8-26 and 9-1 (2) delegate the authority to take testimony and 9-2 administer oaths in a hearing held by the district to a member of 9-3 the board or an employee of the district. 9-4 (b) An order of the board must: 9-5 (1) be in the name of the district; and 9-6 (2) be attested to by the appropriate members of the 9-7 board under the district's rules. 9-8 SECTION 3.05. CIVIL PENALTY; INJUNCTION. (a) A person who 9-9 violates a rule, permit, or order of the district is subject to a 9-10 civil penalty of not less than $50 and not more than $1,000 for 9-11 each violation or each day of a continuing violation. 9-12 (b) The district may sue to enjoin a threatened or present 9-13 activity or to recover the penalty in a district court in the 9-14 county in which the violation occurred. A penalty recovered under 9-15 this subsection shall be paid to the district. 9-16 SECTION 3.06. PERMITS; CONTRACTS; COOPERATIVE AGREEMENTS. 9-17 (a) The district is authorized to contract with a person, firm, 9-18 corporation, municipal corporation, or public agency, the state, 9-19 the United States, or any agency of the state or the United States 9-20 to accomplish the purposes for which it is created. 9-21 SECTION 3.07. FACILITIES. (a) In addition to the authority 9-22 provided by Sections 49.218 and 54.201, Water Code, the district 9-23 may purchase, construct, acquire, own, lease, operate, maintain, 9-24 repair, improve, and extend, at any location within or outside of 9-25 the district, land, or an interest in land, a work, an improvement, 9-26 a facility, a plant, equipment, or an appliance that is incident, 10-1 helpful, or necessary to accomplish the purposes of the district. 10-2 (b) The district may: 10-3 (1) enter into a contract with a person, firm, 10-4 corporation, municipality, entity created under Section 59, Article 10-5 XVI, Texas Constitution, municipal corporation, public agency, or 10-6 other political subdivision of the state; and 10-7 (2) perform any other act consistent with the powers 10-8 of the district and necessary to fulfill the purposes of this Act. 10-9 SECTION 3.08. ACQUISITION AND DISPOSITION OF PROPERTY. The 10-10 district may use a public roadway, street, alley, or easement in 10-11 Fort Bend County to accomplish the purposes of the district. The 10-12 district is not required to obtain a franchise or other 10-13 governmental agreement to use a roadway, street, alley, or easement 10-14 that is owned by the city if, before using the roadway, street, 10-15 alley, or easement, the district obtains written consent of the 10-16 city to the particular use. The district shall pay a fee to a city 10-17 for the use of the roadway, street, alley, or easement that equals 10-18 the lesser of the district's pro rata share, based on actual area 10-19 encumbered, of the fair market value or the initial purchase price 10-20 for the roadway, street, alley, or easement. 10-21 SECTION 3.09. RELOCATION OF FACILITIES. The district may 10-22 relocate, raise, reroute, or change the grade of, or alter the 10-23 construction of, a highway, railroad, electric transmission line, 10-24 pipeline, canal, or drainage ditch, if deemed necessary by the 10-25 board. The district shall pay for any relocation, raising, 10-26 rerouting, changing, or altering under this section, unless 11-1 otherwise agreed in writing by the interested parties. The cost of 11-2 replacement is limited to the comparable replacement of any 11-3 replaced facility, less the replaced facility's net salvage value. 11-4 ARTICLE 4. GENERAL FISCAL PROVISIONS 11-5 SECTION 4.01. DISBURSEMENT OF MONEY. The district may 11-6 disburse money only by check, draft, order, or other instrument 11-7 signed by a person authorized in the bylaws of the district or by 11-8 board resolution. 11-9 SECTION 4.02. FEES AND CHARGES. The district may establish 11-10 fees and charges not to exceed the amounts necessary to enable the 11-11 district to fulfill the obligations of the district as provided by 11-12 this Act. 11-13 SECTION 4.03. LOANS AND GRANTS. (a) The district may apply 11-14 for and receive a loan or grant from the state or the United 11-15 States, or any agency of the state or the United States, or from a 11-16 private entity, for purposes of exercising the powers of the 11-17 district. 11-18 (b) The district may not enter into an agreement under this 11-19 section that violates state or federal law. 11-20 SECTION 4.04. FISCAL YEAR. The board shall establish a 11-21 fiscal year for the district. 11-22 SECTION 4.05. DEPOSITORY BANKS. (a) The board, as provided 11-23 by this section, shall designate at least one bank to serve as a 11-24 depository for the funds of the district. Subject to Section 11-25 49.156, Water Code, the funds of the district shall be deposited in 11-26 a depository bank designated under this subsection. 12-1 (b) Before designating a depository bank, the board shall 12-2 publish notice at least once in a newspaper of general circulation 12-3 in the district to solicit applications from banks interested in 12-4 serving as a depository for the district. The notice shall include 12-5 the time and place of the board meeting at which the board proposes 12-6 to designate a depository bank. The board shall prescribe the term 12-7 of service of a depository bank designated under Subsection (a) of 12-8 this section. 12-9 (c) The board shall review an application received under 12-10 Subsection (b) of this section, including examining the management 12-11 and condition of each bank submitting an application. In reviewing 12-12 an application under this subsection, the board may consider: 12-13 (1) the terms and conditions proposed by a bank for 12-14 handling the district's money; 12-15 (2) the management of the bank; and 12-16 (3) the ability of the bank to handle the district's 12-17 money. 12-18 (d) A bank is not disqualified from being a depository under 12-19 this section because an officer or a director of the bank is a 12-20 member of the board. 12-21 (e) An officer or a director of a bank is not disqualified 12-22 from being a member of the board. 12-23 (f) If the board does not receive an application under this 12-24 section, the board may designate a bank as depository on terms that 12-25 the board finds proper. 12-26 ARTICLE 5. BOND AND TAX PROVISIONS 13-1 SECTION 5.01. TAXES; REVENUE BONDS. (a) For purposes of 13-2 exercising the authority of the district as provided by this Act, 13-3 the district may issue bonds or other obligations that are: 13-4 (1) secured by ad valorem taxes; 13-5 (2) secured by a pledge of all or part of the revenues 13-6 accruing to the district, including revenues received from the sale 13-7 of water or other products, the rendition of service, tolls, 13-8 charges, and any other source of revenue, other than ad valorem 13-9 taxes; and 13-10 (3) secured by both a pledge of all or part of the 13-11 revenues described by Subdivision (2) of this subsection and ad 13-12 valorem taxes. 13-13 (b) An obligation issued by the district shall be authorized 13-14 by resolution of the board, issued in the name of the district, 13-15 signed by the president or vice president, attested to by the 13-16 secretary, and bear the seal of the district. The signatures of 13-17 the president or vice president and the secretary may be printed or 13-18 lithographed on the obligation. The seal of the district may be 13-19 impressed, printed, or lithographed on the obligation. An 13-20 obligation issued by the district: 13-21 (1) shall be in a form prescribed by the board; 13-22 (2) may be in any denomination; 13-23 (3) shall mature serially or otherwise not later than 13-24 50 years from the date of issuance; 13-25 (4) may bear any interest rate; 13-26 (5) may be sold at a price and under terms determined 14-1 by the board to be the most advantageous available; 14-2 (6) may, in the discretion of the board, be made 14-3 callable before maturity at times and prices as provided in the 14-4 obligation; 14-5 (7) may be made registrable as to principal or 14-6 principal and interest; and 14-7 (8) may be secured by an indenture of trust with a 14-8 corporate trustee. 14-9 (c) An obligation under this section may be issued in more 14-10 than one series as required to carry out the purposes of this Act. 14-11 A pledge of revenue may reserve the right to issue additional 14-12 obligations under conditions specified on the pledge. An 14-13 additional obligation is on a parity with or subordinate to the 14-14 original obligation. 14-15 (d) The district is an "issuer" as defined by Section 1, 14-16 Chapter 656, Acts of the 68th Legislature, Regular Session, 1983 14-17 (Article 717q, Vernon's Texas Civil Statutes). 14-18 (e) A board resolution authorizing an obligation or a trust 14-19 indenture under this section may include additional terms to 14-20 provide for a corporate trustee or receiver to take possession of 14-21 facilities of the district in the event of default by the district 14-22 relating to the obligation or trust indenture. The additional 14-23 terms, if any, constitute a contract between the district and the 14-24 owner of the obligation. 14-25 (f) The district may not issue bonds that are secured by or 14-26 otherwise encumber permanent school fund land located within the 15-1 district. 15-2 SECTION 5.02. BOND ANTICIPATION NOTES. The district may 15-3 issue bond anticipation notes for purposes of exercising the powers 15-4 of the district. Bond anticipation notes may be secured by a 15-5 pledge of all or part of the revenues of the district. The 15-6 district may authorize the issuance of bonds to pay the principal 15-7 of and interest on bond anticipation notes issued under this 15-8 section. Bond anticipation notes shall be secured by a pledge of 15-9 all or part of the revenues of the district and may be issued on a 15-10 parity with or subordinate to outstanding bonds of the issuer. If 15-11 the resolution or trust agreement authorizing the issuance of bond 15-12 anticipation notes contains a covenant that the notes are payable 15-13 from the proceeds of subsequently issued bonds, the district is not 15-14 required to demonstrate that the revenues that may be pledged to 15-15 the notes are sufficient to pay the principal of and interest on 15-16 the notes for purposes of receiving approval of the attorney 15-17 general or registration by the comptroller. 15-18 SECTION 5.03. REFUNDING BONDS. (a) The district may issue 15-19 refunding bonds to refund outstanding bonds and interest as 15-20 authorized by this Act. 15-21 (b) Refunding bonds may: 15-22 (1) be issued to refund one or more series of 15-23 outstanding bonds; 15-24 (2) combine the pledges for the outstanding bonds for 15-25 the security of the refunding bonds; or 15-26 (3) be secured by additional revenues. 16-1 (c) Refunding bonds may be issued without holding an 16-2 election to authorize the issuance of the bonds. The provisions of 16-3 this Act relating to the issuance of other bonds by the district, 16-4 security for the bonds, approval by the attorney general, and 16-5 remedies of the holders of the bonds apply to refunding bonds. 16-6 (d) Refunding bonds shall be registered by the comptroller 16-7 on surrender and cancellation of the bonds to be refunded or, if 16-8 the resolution authorizing the issuance of refunding bonds provides 16-9 that the bonds shall be sold and the proceeds deposited in the bank 16-10 where the bonds to be refunded are payable, the refunding bonds may 16-11 be issued in an amount sufficient to pay the principal and interest 16-12 of the bonds to be refunded to their option or maturity date. The 16-13 comptroller shall register the refunding bonds without concurrent 16-14 surrender and cancellation of the bonds to be refunded. 16-15 SECTION 5.04. APPROVAL AND REGISTRATION OF BONDS. District 16-16 bond review and approval is governed by Subchapter F, Chapter 49, 16-17 Water Code. 16-18 SECTION 5.05. BONDS ARE AUTHORIZED INVESTMENTS. All bonds 16-19 and notes of the district are legal and authorized investments for 16-20 banks, savings banks, trust companies, savings and loan 16-21 associations, insurance companies, fiduciaries, trustees, and 16-22 guardians and for the sinking funds of municipalities, counties, 16-23 school districts, or other political corporations or subdivisions 16-24 of the state. Bonds and notes of the district are eligible to 16-25 secure the deposit of any and all public funds of the state and any 16-26 and all public funds of municipalities, counties, school districts, 17-1 or other political corporations or subdivisions of the state. 17-2 Bonds and notes of the district are lawful and sufficient security 17-3 for the deposits to the extent of their value. 17-4 SECTION 5.06. TAXATION. (a) Except for land owned by the 17-5 state, the board may levy and collect ad valorem taxes on land 17-6 within the district for maintenance, improvements, and 17-7 administration relating to the district in amounts approved by the 17-8 qualified voters of the district in an election held for that 17-9 purpose. 17-10 (b) A maintenance tax or an administration tax shall not 17-11 exceed the maximum approved rate and an approved rate shall remain 17-12 in effect unless a different rate is approved by the qualified 17-13 voters in a subsequent election. 17-14 SECTION 5.07. PROPERTY: RENDITION; VALUATION; LEVY. 17-15 (a) Except as provided by this section, the rendition and 17-16 assessment of property for taxation, the equalization of values, 17-17 and the collection of taxes for the benefit of the district shall 17-18 be conducted in accordance with the law applicable to counties to 17-19 the extent possible. 17-20 (b) The tax assessor-collector of each county shall act as 17-21 the tax assessor-collector for the district for district property 17-22 located in the county. The tax assessor-collector in each county 17-23 shall place on the county tax rolls a column or columns as 17-24 necessary to show the taxes, including the amount of taxes, levied 17-25 by the district, based on the value of the property as approved and 17-26 equalized. The fee charged by each county tax assessor-collector 18-1 for assessing and collecting taxes is one percent of the taxes 18-2 collected and shall be paid and disbursed by the district in the 18-3 same manner as other fees of office. 18-4 (c) The mechanisms available to enforce the collection of 18-5 state and county taxes may be used by the district to enforce the 18-6 collection of taxes levied by the district. The district is 18-7 entitled to require the officers of each county to enforce and 18-8 collect the taxes due to the district in that county as provided 18-9 for the enforcement of state and county taxes. 18-10 (d) Taxes assessed and levied for the benefit of the 18-11 district shall be payable and shall become delinquent at the same 18-12 time, in the same manner, and subject to the same discount for 18-13 advance payment as taxes levied by and for the benefit of the 18-14 county in which the property is taxable. The fee for collecting 18-15 delinquent taxes through prosecution of suit is 15 percent of the 18-16 taxes collected by the suit, to be paid and disbursed by the 18-17 district in the same manner as other fees of office. 18-18 (e) At the same time that the commissioners court levies 18-19 county taxes, the board shall levy a tax on all taxable property in 18-20 the district that is subject to taxation. The board shall 18-21 immediately certify the tax rate to the tax assessor-collector of 18-22 each county that contains territory within the district. 18-23 ARTICLE 6. ADDITION OF LAND TO DISTRICT 18-24 SECTION 6.01. ANNEXATION. Notwithstanding any other law, 18-25 additional territory may be added to the district as provided by 18-26 Sections 6.02, 6.03, and 6.04 of this Act. 19-1 SECTION 6.02. PETITION. (a) An owner or owners of land, 19-2 whether or not contiguous to the territory of the district, may 19-3 file with the board a petition requesting that the land described 19-4 in the petition by metes and bounds or by lot and block number, if 19-5 there is a recorded plat of the area, be included in the district. 19-6 (b) A petition under Subsection (a) of this section shall be 19-7 signed and executed in the manner provided by law for the 19-8 conveyance of real estate. 19-9 (c) The board shall hear and consider a petition received 19-10 under Subsection (a) of this section and may add to the district 19-11 the land described in the petition if: 19-12 (1) the board determines that adding the land to the 19-13 district is advantageous to the district; and 19-14 (2) the water system and other improvements of the 19-15 district are sufficient or will be sufficient to provide service to 19-16 the land added to the district without injuring the land in the 19-17 district before the petition is granted. 19-18 SECTION 6.03. NOTICE AND HEARING. (a) A petition 19-19 requesting that the district annex a defined area shall be filed 19-20 with the secretary of the board and shall be signed by: 19-21 (1) a majority in value of the owners of land in the 19-22 defined area, as shown by the tax rolls of the county or counties 19-23 in which the defined area is located, if the number of landowners 19-24 in the defined area is 50 or less; or 19-25 (2) 50 landowners if the number of landowners in the 19-26 defined area is more than 50. 20-1 (b) The board shall issue an order setting a time and place 20-2 to hear a petition filed under Subsection (a) of this section. The 20-3 hearing shall be held not earlier than the 15th day after the date 20-4 on which the board issues the order. 20-5 (c) The secretary shall issue a notice providing the time 20-6 and place of the hearing set under Subsection (b) of this section 20-7 and describing the area proposed to be annexed. Notice of the 20-8 hearing shall be given by: 20-9 (1) posting copies of the notice in three public 20-10 places in the district and in one public place in the area proposed 20-11 to be annexed for at least seven days before the date of the 20-12 hearing; and 20-13 (2) publishing a copy of the notice in a newspaper of 20-14 general circulation in the county or counties in which the area 20-15 proposed to be annexed is located at least seven days before the 20-16 date of the hearing. 20-17 (d) If the board finds that the proposed annexation is 20-18 feasible and practicable and would benefit the district and the 20-19 area proposed to be added to the district, the board may by order 20-20 receive all or a part of the proposed area as an addition to and 20-21 part of the district. An order issued by the board under this 20-22 subsection shall describe the area added to the district and be 20-23 entered in the minutes. 20-24 SECTION 6.04. ANNEXATION ORDER. (a) A copy of the order 20-25 adding land to the district shall be signed by a majority of the 20-26 members of the board, attested to by the secretary of the board, 21-1 and filed and recorded in the deed records of the county or 21-2 counties in which the district is located. 21-3 (b) On the date that the order is recorded as required by 21-4 Subsection (a) of this section, the area described in the order is 21-5 included in the territory of the district. 21-6 ARTICLE 7. EXCLUSION OF LAND FROM DISTRICT 21-7 SECTION 7.01. PETITION. (a) Notwithstanding any other law, 21-8 the board may, if there is no outstanding board order relating to 21-9 an election for the authorization of bonds payable in whole or in 21-10 part from taxes and the district does not have outstanding 21-11 indebtedness secured by taxes or net revenues of the district, 21-12 order a hearing to be held to exclude land from the district on 21-13 petition of a landowner or on motion of the board. 21-14 (b) A petition to exclude land from the district must 21-15 specifically describe the land to be excluded by metes and bounds 21-16 or by reference to a plat recorded in the plat records of the 21-17 county or counties in which the land is located. The petition must 21-18 be signed by at least 10 percent of the owners of land in the area 21-19 to be excluded or, if the number of owners of land is more than 50, 21-20 by at least five of the owners of land. The petition must be filed 21-21 with the district before the seventh day preceding the date the 21-22 hearing is held to consider the petition. The petition must 21-23 clearly state the grounds supporting the exclusion of the land from 21-24 the district. The board may consider only the grounds stated in 21-25 the petition. 21-26 SECTION 7.02. NOTICE AND HEARING. (a) The board shall hold 22-1 a hearing on petition of a landowner to exclude land from the 22-2 district. 22-3 (b) Notice of hearing under this section shall be published 22-4 by the board once a week for two consecutive weeks in one or more 22-5 newspapers of general circulation in the district. The first 22-6 notice shall be published not earlier than the 40th day or later 22-7 than the 14th day preceding the date of the hearing. 22-8 (c) The board may not exclude land from the district unless 22-9 the board determines that: 22-10 (1) the district has no obligations that will be 22-11 impaired by the exclusion of the land; 22-12 (2) the district will incur no obligations as a result 22-13 of the exclusion; and 22-14 (3) the exclusion is in the best interests of the 22-15 district. 22-16 (d) The board, after considering all engineering data and 22-17 other evidence presented at the hearing and making the 22-18 determinations required by Subsection (c) of this section, shall 22-19 enter an order excluding the land from the district and redefining 22-20 the boundaries of the district as appropriate. If land proposed to 22-21 be excluded contains water or wastewater customers of the district, 22-22 the customers remain customers of the district. Owners of lots 22-23 within the land proposed to be excluded in which water and 22-24 wastewater facilities have been extended retain the right to 22-25 connect to the district's water and wastewater system and become 22-26 district customers. 23-1 SECTION 7.03. EFFECTIVE DATE OF ORDER EXCLUDING LAND. 23-2 (a) Except as provided by Subsection (c) of this section, an order 23-3 of the board excluding land from the district on petition signed by 23-4 the owner or owners of land that is proposed to be excluded takes 23-5 effect on the date on which the board enters the order. 23-6 (b) Except as provided by Subsection (c) of this section, an 23-7 order excluding land from the district on petition signed by less 23-8 than all the owners of land that is proposed to be excluded takes 23-9 effect: 23-10 (1) on the day immediately following the date on which 23-11 a petition under Section 7.04 of this Act must be received by the 23-12 board if the district does not receive a petition under that 23-13 section; or 23-14 (2) on the day immediately following the date on which 23-15 the election returns are canvassed if the exclusion is ratified at 23-16 an election under Section 7.04 of this Act. 23-17 (c) An order excluding land from the district under this 23-18 section may not take effect unless all taxes levied and assessed by 23-19 the district within the land that is proposed to be excluded are 23-20 paid in full. 23-21 SECTION 7.04. PETITION FOR RATIFICATION ELECTION. (a) If 23-22 the board issues an order excluding land on petition signed by less 23-23 than all the owners of land in the area proposed to be excluded, 23-24 the board shall publish a notice that describes the excluded land 23-25 and states that the exclusion will become final unless the board 23-26 receives, not later than the 25th day after the date on which the 24-1 board issues the order, a petition requesting a ratification 24-2 election. A petition under this subsection must be signed by at 24-3 least 10 percent of the qualified voters residing in the area that 24-4 is proposed to be excluded from the district. 24-5 (b) If the board receives a petition under Subsection (a) of 24-6 this section, the order excluding land from the district is not 24-7 effective unless the exclusion is approved by a majority vote of 24-8 the residents of the district at a ratification election held for 24-9 that purpose. 24-10 (c) A ratification election, including notice of the 24-11 election and the qualifications of the voters, shall be conducted 24-12 as provided by Subchapter J, Chapter 49, Water Code. 24-13 ARTICLE 8. MISCELLANEOUS PROVISIONS 24-14 SECTION 8.01. TAX EXEMPTION. The purposes stated in this 24-15 Act are for the benefit of the people of the state, including the 24-16 improvement of property and industry. The district, in carrying 24-17 out the purposes of this Act, is performing an essential public 24-18 function under the constitution and is not required to pay a tax or 24-19 assessment on a project of the district or on the bonds or notes 24-20 issued by the district under this Act, including the transfer of, 24-21 the income from, and the profits made on the sale of issued bonds 24-22 and notes. 24-23 SECTION 8.02. INITIAL ELECTION. Notwithstanding Section 24-24 2.04 of this Act, the district shall hold its first election for 24-25 permanent directors on the first Saturday in May 2002. 24-26 SECTION 8.03. FINDINGS RELATING TO PROCEDURAL REQUIREMENTS. 25-1 (a) The proper and legal notice of the intention to introduce this 25-2 Act, setting forth the general substance of this Act, has been 25-3 published as provided by law, and the notice and a copy of this Act 25-4 have been furnished to all persons, agencies, officials, or 25-5 entities to which they are required to be furnished by the 25-6 constitution and other laws of this state, including the governor, 25-7 who has submitted the notice and Act to the Texas Natural Resource 25-8 Conservation Commission. 25-9 (b) The Texas Natural Resource Conservation Commission has 25-10 filed its recommendations relating to this Act with the governor, 25-11 lieutenant governor, and speaker of the house of representatives 25-12 within the required time. 25-13 (c) All requirements of the constitution and laws of this 25-14 state and the rules and procedures of the legislature with respect 25-15 to the notice, introduction, and passage of this Act are fulfilled 25-16 and accomplished. 25-17 SECTION 8.04. SEVERABILITY. If any word, phrase, clause, 25-18 sentence, paragraph, section, or other part of this Act or the 25-19 application of this Act to any person or circumstance is ever held 25-20 to be invalid or unconstitutional by a court of competent 25-21 jurisdiction in this state, the remainder of the Act and the 25-22 application of that word, phrase, clause, sentence, paragraph, 25-23 section, or other part of this Act to other persons or 25-24 circumstances are not affected by that holding. To the extent of a 25-25 conflict between a provision of this Act and any other law or 25-26 statute, this Act controls. 26-1 SECTION 8.05. EMERGENCY. The importance of this legislation 26-2 and the crowded condition of the calendars in both houses create an 26-3 emergency and an imperative public necessity that the 26-4 constitutional rule requiring bills to be read on three several 26-5 days in each house be suspended, and this rule is hereby suspended, 26-6 and that this Act take effect and be in force from and after its 26-7 passage, and it is so enacted.