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AN ACT
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relating to election procedures and qualifications of members of |
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boards of directors for water supply or sewer service corporations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 67, Water Code, is amended |
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by adding Sections 67.0051, 67.0052, 67.0053, and 67.0054 to read |
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as follows: |
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Sec. 67.0051. QUALIFICATIONS FOR ELECTION OR APPOINTMENT AS |
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DIRECTOR. (a) To be qualified for election or appointment as a |
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director, a person must be: |
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(1) 18 years of age or older on the first day of the |
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term to be filled at the election or on the date of appointment, as |
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applicable; and |
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(2) a member or shareholder of the corporation. |
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(b) In addition to the qualifications prescribed by |
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Subsection (a), a person is not qualified to serve as a director if |
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the person: |
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(1) has been determined by a final judgment of a court |
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exercising probate jurisdiction to be: |
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(A) totally mentally incapacitated; or |
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(B) partially mentally incapacitated without the |
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right to vote; or |
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(2) has been finally convicted of a felony from which |
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the person has not been pardoned or otherwise released from the |
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resulting disabilities. |
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(c) If the board determines that a person serving as a |
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director does not have the qualifications prescribed by Subsections |
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(a) and (b), the board shall, not later than the 60th day after the |
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date the board makes that determination, remove the director and |
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fill the vacancy by appointing a person who has the qualifications |
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prescribed by those subsections. |
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Sec. 67.0052. BALLOT APPLICATION. (a) To be listed on the |
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ballot as a candidate for a director's position, a person must file |
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an application with the corporation that includes: |
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(1) the director's position sought, including any |
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position number or other distinguishing number; |
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(2) a petition, signed by the lesser of 20 members or |
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shareholders or five percent of the members or shareholders, |
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requesting that the person's name be placed on the ballot as a |
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candidate for that position; |
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(3) the person's written consent to serve, if elected; |
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(4) biographical information about the person; and |
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(5) a statement of the person's qualifications, |
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including a statement that the person has the qualifications |
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prescribed by Section 67.0051. |
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(b) The application must be filed with the corporation not |
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later than the 45th day before the date of the annual meeting. |
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(c) The corporation shall make available director candidate |
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application forms at the corporation's main office and shall |
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provide application forms by mail or electronically on request. |
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Sec. 67.0053. BALLOT. (a) Not later than the 30th day |
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before the date of an annual meeting, the corporation shall mail to |
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each member or shareholder of record: |
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(1) written notice of the meeting; |
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(2) the election ballot; and |
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(3) a statement of each candidate's qualifications, |
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including biographical information as provided in each candidate's |
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application. |
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(b) The election ballot must include: |
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(1) the number of directors to be elected; and |
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(2) the names of the candidates for each position. |
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Sec. 67.0054. ELECTION PROCEDURES. (a) A member or |
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shareholder may vote: |
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(1) in person at the annual meeting; |
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(2) by mailing a completed ballot to the office of the |
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independent election auditor selected under Section 67.007(d) or to |
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the corporation's main office, which ballot must be received by the |
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corporation not later than noon on the business day before the date |
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of the annual meeting; or |
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(3) by delivering a completed ballot to the office of |
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the independent election auditor or to the corporation's main |
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office not later than noon on the business day before the date of |
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the annual meeting. |
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(b) The independent election auditor shall receive and |
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count the ballots before the annual meeting is adjourned. |
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(c) For each director's position, the candidate who |
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receives the highest number of votes is elected. |
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(d) If two or more candidates for the same position tie for |
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the highest number of votes for that position, those candidates |
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shall draw lots to determine who is elected. |
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(e) The independent election auditor shall provide the |
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board with a written report of the election results. |
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(f) The board may adopt necessary rules or bylaws to |
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implement this section, including rules or bylaws to ensure the |
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fairness, integrity, and openness of the voting process. |
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SECTION 2. Section 67.007, Water Code, is amended by adding |
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Subsections (a-1) and (d) and amending Subsections (b) and (c) to |
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read as follows: |
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(a-1) A quorum for the transaction of business at a meeting |
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of the members or shareholders is a majority of the members and |
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shareholders present. In determining whether a quorum is present, |
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all members and shareholders who mailed or delivered ballots to the |
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independent election auditor or the corporation on a matter |
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submitted to a vote at the meeting are counted as present. |
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(b) The board shall adopt written procedures for conducting |
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an annual or special meeting of the members or shareholders in |
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accordance with this section and Sections 67.0052, 67.0053, and |
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67.0054. The procedures[, which] shall include the following: |
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(1) notification to eligible members or shareholders |
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of the proposed agenda, location, and date of the meeting; |
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(2) director [establishment of a quorum consisting of
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proxies and the votes of members or shareholders present;
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[(3) nomination and] election procedures, including |
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candidate application procedures; |
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(3) [(4)] approval of the [proxy and] ballot form to |
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be used; and |
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(4) [(5)] validation of eligible voters, [proxies,] |
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ballots, and election results. |
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(c) The board shall adopt an official [proxy and] ballot |
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form to be used in conducting the business of the corporation at any |
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annual or special meeting. No other [proxy or] ballot form will be |
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valid. Ballots [Proxies and ballots] from members or shareholders |
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are confidential and are exempted from disclosure by the |
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corporation until after the date of the relevant election. |
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(d) The board shall select an independent election auditor |
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not later than the 30th day before the scheduled date of the annual |
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meeting. The independent election auditor is not required to be an |
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experienced election judge or auditor and may serve as an unpaid |
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volunteer. At the time of selection and while serving in the |
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capacity of an independent election auditor, the independent |
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election auditor may not be associated with the corporation as: |
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(1) an employee; |
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(2) a director or candidate for director; or |
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(3) an independent contractor engaged by the |
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corporation as part of the corporation's regular course of |
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business. |
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SECTION 3. The changes in law made by this Act in the |
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qualifications of directors of a water supply or sewer service |
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corporation do not affect the entitlement of a director serving on |
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the board of directors immediately before the effective date of |
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this Act to continue to carry out the board's functions for the |
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remainder of the director's term. The changes in law apply only to |
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a director elected or appointed on or after the effective date of |
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this Act. This Act does not prohibit a person who is a member of the |
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board of directors on the effective date of this Act from being |
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reelected or reappointed to the board of directors if the person has |
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the qualifications required for a director under Section 67.0051, |
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Water Code, as added by this Act. |
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SECTION 4. This Act takes effect September 1, 2011. |
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______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 333 passed the Senate on March |
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24, 2011, by the following vote: Yeas 31, Nays 0; and that the |
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Senate concurred in House amendment on April 19, 2011, by the |
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following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 333 passed the House, with |
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amendment, on April 13, 2011, by the following vote: Yeas 146, |
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Nays 0, one present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |