H.B. No. 2590
 
 
 
 
AN ACT
  relating to the administration, powers, and duties of water
  districts.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 42.042(b), (f), (g), and (h), Local
  Government Code, are amended to read as follows:
         (b)  If the governing body fails or refuses to give its
  consent for the creation of the political subdivision, including a
  water district previously created by an act of the legislature, on
  mutually agreeable terms within 90 days after the date the
  governing body [it] receives a written request for the consent, a
  majority of the qualified voters of the area of the proposed
  political subdivision and the owners of at least 50 percent of the
  land in the proposed political subdivision may petition the
  governing body to make available to the area the water, sanitary
  sewer services, or both that would be provided by the political
  subdivision.
         (f)  If the municipality fails or refuses to give its consent
  to the creation of the political subdivision, including a water
  district previously created by an act of the legislature, or fails
  or refuses to execute a contract providing for the water or sanitary
  sewer services requested within the time limits prescribed by this
  section, the applicant may petition the Texas [Natural Resource
  Conservation] Commission on Environmental Quality for the creation
  of the political subdivision or the inclusion of the land in a
  political subdivision. The commission shall allow creation or
  confirmation of the creation of the political subdivision or
  inclusion of the land in a proposed political subdivision on
  finding that the municipality 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 must provide that
  construction of the facilities necessary to serve the land will
  begin within two years and will be substantially completed within
  4-1/2 years after the date the petition was filed with the
  municipality.
         (g)  On an appeal taken to the district court from the [Texas
  Natural Resource Conservation Commission's] ruling of the Texas
  Commission on Environmental Quality, all parties to the commission
  hearing must be made parties to the appeal. The court shall hear
  the appeal within 120 days after the date the appeal is filed. If
  the case is continued or appealed to a higher court beyond the
  120-day period, the court shall require the appealing party or
  party requesting the 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 the 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. On final disposition, a court may
  award damages, including any damages for delays, attorney's fees,
  and costs of court to the prevailing party.
         (h)  A municipality may not unilaterally extend the time
  limits prescribed by this section through the adoption of
  preapplication periods or by passage of any rules, resolutions,
  ordinances, or charter provisions. However, the municipality and
  the petitioner may jointly petition the Texas [Natural Resource
  Conservation] Commission on Environmental Quality to request an
  extension of the time limits.
         SECTION 2.  Section 49.107(d), Water Code, is amended to
  read as follows:
         (d)  The proposition in an operation and maintenance tax
  election may be for a specific maximum rate or for an unlimited
  rate. The ballot for an operation and maintenance tax election
  shall be printed to provide for voting for or against the
  proposition: "An Operation and Maintenance Tax" and either "Not to
  exceed ______ ($______) Per One Hundred Dollars ($100) Valuation of
  Taxable Property" or "At an Unlimited Rate," as applicable. The
  ballot may describe the general purpose and state the
  constitutional authorization of the operation and maintenance tax.
         SECTION 3.  Section 49.351(a), Water Code, is amended to
  read as follows:
         (a)  A district providing potable water or sewer services or
  facilities [service to household users] may, separately or jointly
  with another district, municipality, or other political
  subdivision, establish, operate, and maintain, finance with ad
  valorem taxes, mandatory fees, or voluntary contributions, and
  issue bonds for a fire department to perform all fire-fighting
  services within the district as provided in this subchapter and may
  provide for the construction and purchase of necessary buildings,
  facilities, land, and equipment and the provision of an adequate
  water supply.
         SECTION 4.  Section 54.022, Water Code, is amended to read as
  follows:
         Sec. 54.022.  TEMPORARY DIRECTORS. (a) If the commission
  grants the petition, it shall appoint five temporary directors to
  serve until permanent directors are elected.
         (b)  Except as provided by Subsection (c), a majority of
  temporary directors appointed under Subsection (a) must be
  residents of:
               (1)  the county in which the district is located;
               (2)  a county adjacent to the county described by
  Subdivision (1); or
               (3)  if the district is located in a county that is in a
  metropolitan statistical area designated by the United States
  Office of Management and Budget or its successor agency, a county in
  the same metropolitan statistical area as the county in which the
  district is located.
         (c)  The commission may appoint temporary directors who do
  not meet the requirements of Subsection (b) if the petition or the
  application accompanying the petition provides that the petitioner
  made reasonable efforts but failed to identify candidates meeting
  those requirements who were willing to serve as temporary
  directors.
         SECTION 5.  Section 54.030, Water Code, is amended by
  amending Subsections (b) and (c) and adding Subsections (d) and (e)
  to read as follows:
         (b)  The governing body of a district which desires to
  convert into a district operating under this chapter shall, after
  providing notice in accordance with Section 54.032, hold a hearing
  on the question of the conversion of the district [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.
         (c)  The governing body of the converting district must
  present a general description of any litigation that is pending
  against the district at the hearing under Subsection (b).
         (d)  After the hearing held under Subsection (b), the
  governing body of the converting district may adopt and enter in the
  minutes of the governing body a resolution declaring that in the
  judgment of the governing body, conversion under this section[,]
  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 that the commission approve [to hold a hearing on
  the question of] the conversion of the district.
         (e) [(c)]  A copy of the resolution under Subsection (d)
  shall be:
               (1)  filed with the commission; and
               (2)  mailed to each state senator and representative
  who represents the area in which the district is located.
         SECTION 6.  Section 54.032(a), Water Code, is amended to
  read as follows:
         (a)  The governing body of a district described by Section
  54.030(b) shall give notice [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].
         SECTION 7.  Section 54.033(a), Water Code, is amended to
  read as follows:
         (a)  After receiving a request for the approval of a
  conversion under Section 54.030(d) [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, the
  commission [it] shall enter an order making this finding and the
  district shall become a district operating under this chapter and
  no confirmation election is [shall be] required.
         SECTION 8.  Section 54.234(a), Water Code, is amended to
  read as follows:
         (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, operate,
  maintain, 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.
         SECTION 9.  The heading to Section 54.2351, Water Code, is
  amended to read as follows:
         Sec. 54.2351.  CONTRACTS WITH OTHER DISTRICTS, [OR] WATER
  SUPPLY CORPORATIONS, OR OTHER RETAIL PUBLIC UTILITIES.
         SECTION 10.  Section 54.2351, Water Code, is amended by
  adding Subsection (i) to read as follows:
         (i)  In this subsection, "retail public utility" has the
  meaning assigned by Section 13.002.  A district may enter into a
  contract with a retail public utility for water or sewer service
  under which the retail public utility may use the district's water
  or sewer system to serve customers located in the district.
         SECTION 11.  Section 54.801(a), Water Code, is amended to
  read as follows:
         (a)  A district that is composed of at least 1,000 [1,500]
  acres may define areas or designate certain property of the
  district to pay for improvements, facilities, or services that
  primarily benefit that area or property and do not generally and
  directly benefit the district as a whole.
         SECTION 12.  Section 54.802(b), Water Code, is amended to
  read as follows:
         (b)  The board shall file an engineer's report [adopt a
  proposed plan] for improvements in the defined area or to serve the
  designated property [in the manner provided by Section 49.106].
         SECTION 13.  Section 54.805, Water Code, is amended to read
  as follows:
         Sec. 54.805.  OBTAINING FUNDS TO CONSTRUCT, ADMINISTER,
  MAINTAIN, AND OPERATE IMPROVEMENTS AND FACILITIES IN DEFINED AREAS
  OR DESIGNATED PROPERTY. On adoption of the proposed plan [plans] as
  provided by this subchapter [Section 54.804 of this code] and voter
  approval of the imposition of taxes and issuance of bonds [the
  plans], the district, under the limitations of this subchapter, may
  apply separately, differently, equitably, and specifically its
  taxing power and lien authority to the defined area or designated
  property to provide money to construct, administer, maintain, and
  operate improvements and facilities that primarily benefit the
  defined area or designated property.
         SECTION 14.  Section 54.806(a), Water Code, is amended to
  read as follows:
         (a)  Before bonds may be issued or taxes may be imposed for
  the defined area or designated property, the bonds or taxes [the
  adopted plans may become effective, they] must be approved by the
  voters in the defined area or within the boundaries of the
  designated property. The election shall be conducted as provided
  by Section 49.106 for an election to authorize the issuance of bonds
  or Section 49.107 for an election to authorize the imposition of an
  operation and maintenance tax.
         SECTION 15.  Section 54.809, Water Code, is amended to read
  as follows:
         Sec. 54.809.  ISSUANCE OF BONDS AND IMPOSITION [LEVY] OF TAX
  FOR DEFINED AREA OR DESIGNATED PROPERTY. After approval by the
  voters [the order is recorded], the district may issue [its] bonds
  and impose taxes to provide the specific plant, works, and
  facilities included in the engineer's report [plans adopted] for
  the defined area, or to serve the designated property [and shall
  provide the plant, works, and facilities].
         SECTION 16.  Section 54.812(b), Water Code, is amended to
  read as follows:
         (b)  The prescribed notice shall be inserted into the general
  notice after the first sentence and shall read substantially as
  follows: "The real property described below, which you are about to
  purchase, may [is] also be located within a defined [designated]
  area of the district and the [your] land may [will] be subject to
  defined area taxes in addition to the [a higher tax than] other
  taxes of [land within] the district. As of this date, the
  additional [Your] rate of taxes within the defined area is [will be
  higher by] $_____ on each $100 of assessed valuation [than land not
  within the designated area]."
         SECTION 17.  Section 6901.061(e), Special District Local
  Laws Code, is amended to read as follows:
         (e)  The district may not issue bonds or other obligations
  secured wholly or partly by ad valorem taxes to finance a project
  authorized by Subsection (b) unless the issuance is approved by a
  vote of a two-thirds majority of the voters of the defined area to
  be benefited by the project as provided by Subchapter J, Chapter 54,
  Water Code, voting at an election called for that purpose. [The
  simple majority vote approval required by Section 54.808(a), Water
  Code, does not apply to an election under this subsection.]
         SECTION 18.  Section 8130.151(b), Special District Local
  Laws Code, is amended to read as follows:
         (b)  The district may not issue bonds or other obligations
  secured in whole or in part by ad valorem taxation to finance
  projects authorized by Section 8130.051 unless the issuance is
  approved by a vote of a two-thirds majority of the voters of the
  district or of the defined area to be benefited by the project as
  provided by Subchapter J, Chapter 54, Water Code, voting at an
  election called for that purpose. [The simple majority vote
  approval required by Section 54.808(a), Water Code, does not apply
  to an election under this subsection.]
         SECTION 19.  Section 8176.151(b), Special District Local
  Laws Code, is amended to read as follows:
         (b)  The district may not issue bonds or other obligations
  secured wholly or partly by ad valorem taxation to finance projects
  authorized by Section 8176.051 unless the issuance is approved by a
  vote of a two-thirds majority of the voters in the district or of
  the defined areas to be benefited by the project as provided by
  Subchapter J, Chapter 54, Water Code, voting at an election called
  for that purpose. [The simple majority vote approval required by
  Section 54.808(a), Water Code, does not apply to an election under
  this subsection.]
         SECTION 20.  Section 8198.151(b), Special District Local
  Laws Code, is amended to read as follows:
         (b)  The district may not issue bonds or other obligations
  secured wholly or partly by ad valorem taxation to finance projects
  authorized by Section 8198.051 unless the issuance is approved by a
  vote of a two-thirds majority of the voters in the district or of
  the defined areas to be benefited by the project as provided by
  Subchapter J, Chapter 54, Water Code, voting at an election called
  for that purpose. [The simple majority vote approval required by
  Section 54.808(a), Water Code, does not apply to an election under
  this subsection.]
         SECTION 21.  Section 8261.151(b), Special District Local
  Laws Code, is amended to read as follows:
         (b)  The district may not issue bonds or other obligations to
  finance projects authorized by Section 8261.051 unless the issuance
  is approved by a vote of a two-thirds majority of the district
  voters, or a two-thirds majority of voters in a defined area that
  will benefit from the project, as provided by Subchapter J, Chapter
  54, Water Code, voting at an election called for that purpose. [The
  simple majority vote approval required by Section 54.808(a), Water
  Code, does not apply to an election under this section.]
         SECTION 22.  Section 8413.151(b), Special District Local
  Laws Code, is amended to read as follows:
         (b)  The district may not issue bonds or other obligations
  secured wholly or partly by ad valorem taxation to finance projects
  authorized by Section 8413.051 unless the issuance is approved by a
  vote of a two-thirds majority of the voters in the district or of
  the defined areas to be benefited by the project as provided by
  Subchapter J, Chapter 54, Water Code, voting at an election called
  for that purpose. [The simple majority vote approval required by
  Section 54.808(a), Water Code, does not apply to an election under
  this subsection.]
         SECTION 23.  Section 8467.151(b), Special District Local
  Laws Code, is amended to read as follows:
         (b)  The district may not issue bonds or other obligations
  secured wholly or partly by ad valorem taxation to finance projects
  authorized by Section 8467.053 unless the issuance is approved by a
  vote of a two-thirds majority of the voters in the district or of
  the defined areas to be benefited by the project as provided by
  Subchapter J, Chapter 54, Water Code, voting at an election called
  for that purpose. [The simple majority vote approval required by
  Section 54.808(a), Water Code, does not apply to an election under
  this subsection.]
         SECTION 24.  Sections 54.234(b), 54.803, 54.804(a), 54.807,
  and 54.808, Water Code, are repealed.
         SECTION 25.  Section 54.022, Water Code, as amended by this
  Act, does not affect the entitlement of a temporary director
  serving on the board of directors of a municipal utility district
  under Chapter 54, Water Code, immediately before the effective date
  of this Act to continue to serve as a temporary director for the
  remainder of the director's term.
         SECTION 26.  The changes in law made by this Act to Chapter
  54, Water Code, apply only to a water district's conversion into a
  municipal utility district operating under Chapter 54, Water Code,
  occurring on or after the effective date of this Act. A conversion
  that occurs before the effective date of this Act is governed by the
  law in effect on the date the conversion occurred, and the former
  law is continued in effect for that purpose.
         SECTION 27.  This Act takes effect September 1, 2019.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2590 was passed by the House on May 3,
  2019, by the following vote:  Yeas 140, Nays 0, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 2590 on May 24, 2019, by the following vote:  Yeas 89, Nays 51,
  3 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 2590 was passed by the Senate, with
  amendments, on May 22, 2019, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor