Texas 2009 - 81st Regular

Texas Senate Bill SB1960 Compare Versions

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1	1	By: Wentworth S.B. No. 1960
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to increased oversight, openness, transparency, and
7	7	accountability for water supply or sewer service corporations.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 67.005, Water Code, is amended by adding
10	10	Subsection (g) to read as follows:
11	11	(g) If more than 50 percent of the corporation's connections
12	12	to provide water or sewer service are within the corporate limits of
13	13	a general-law municipality, the municipality, by ordinance or
14	14	resolution adopted at least 30 days before the date of the annual
15	15	meeting of the members or shareholders of the corporation, may
16	16	create a new position on the board of the corporation and appoint a
17	17	director to serve in that position as a nonvoting member of the
18	18	board. An appointed director serves a two-year term. A director
19	19	appointed under this subsection has all of the rights and
20	20	responsibilities of an elected director except that such director
21	21	does not have the right to vote or the right to participate in an
22	22	executive session of the board of the corporation in which the board
23	23	will receive legal advice concerning contracts or litigation
24	24	relating to the municipality.
25	25	SECTION 2. Subchapter A, Chapter 67, Water Code, is amended
26	26	by adding Sections 67.0061, 67.0062, and 67.0063 to read as
27	27	follows:
28	28	Sec. 67.0061. DIRECTOR NOMINATIONS. (a) To be listed on
29	29	the ballot as a candidate for election to a director's position, a
30	30	person must file with the corporation an application that includes:
31	31	(1) the person's written consent to serve, if elected;
32	32	(2) biographical information about the person; and
33	33	(3) a statement of the person's qualifications,
34	34	including:
35	35	(A) a statement that the person meets the
36	36	requirements of Sections 11.002(1), (3), and (4), Election Code;
37	37	and
38	38	(B) whether the person is a member of the
39	39	corporation.
40	40	(b) The application must be filed with the corporation not
41	41	later than the 70th day before the date of the annual meeting.
42	42	(c) The corporation shall make available director candidate
43	43	application forms at the main office of the corporation.
44	44	Sec. 67.0062. BALLOT FOR ELECTION OF DIRECTORS. The
45	45	secretary-treasurer of the board shall:
46	46	(1) have the names of all candidates for each
47	47	director's position printed on the ballot; and
48	48	(2) not later than the 45th day before the date of the
49	49	annual meeting, mail the ballot to each person who is a member or
50	50	shareholder, along with a statement of the number of directors to be
51	51	elected and the biographical information about each candidate,
52	52	including the candidate's qualifications as provided by each
53	53	candidate for director in the candidate's application.
54	54	Sec. 67.0063. ELECTION OF DIRECTORS. (a) A member or
55	55	shareholder may vote:
56	56	(1) in person at the annual meeting;
57	57	(2) by delivering a completed ballot to the member's
58	58	proxy to submit at the annual meeting;
59	59	(3) by mailing a completed ballot postmarked not later
60	60	than the sixth day before the date of the annual meeting to the
61	61	office of the independent election auditor selected by the members
62	62	or shareholders at the preceding annual meeting; or
63	63	(4) by delivering a completed ballot to the main
64	64	office of the corporation not later than noon of the day before the
65	65	date of the annual meeting.
66	66	(b) The corporation shall place each ballot received under
67	67	Subsection (a)(4) in a sealed envelope and shall deliver the sealed
68	68	envelopes to the independent election auditor at the annual
69	69	meeting.
70	70	(c) No person, including the corporation, may use any type
71	71	of incentive to encourage a member or shareholder to authorize the
72	72	corporation, a committee of the corporation, or another person to
73	73	act as the member's proxy in casting the vote of the member in a
74	74	director's election. The corporation may provide incentives to
75	75	obtain proxies or to encourage attendance at an annual or special
76	76	meeting of the members solely for the purpose of establishing a
77	77	quorum.
78	78	(d) The independent election auditor shall receive and
79	79	count the ballots before the annual meeting is adjourned.
80	80	(e) For each director's position, the nominee who receives
81	81	the highest number of votes is elected.
82	82	(f) If two or more candidates for a director's position tie
83	83	for the highest number of votes for that position, those candidates
84	84	shall draw lots under the direction of the independent election
85	85	auditor to determine who is elected.
86	86	(g) The independent election auditor shall provide the
87	87	board with a written report of the election results.
88	88	(h) The board may adopt rules as needed to implement this
89	89	section, including rules to ensure the fairness, integrity, and
90	90	openness of the voting process.
91	91	SECTION 3. Section 67.007, Water Code, is amended by
92	92	amending Subsection (b) and adding Subsection (d) to read as
93	93	follows:
94	94	(b) The board shall adopt written procedures for conducting
95	95	an annual or special meeting of the members or shareholders, which
96	96	shall include the following:
97	97	(1) notification to eligible members or shareholders
98	98	of the proposed agenda, location, and date of the meeting;
99	99	(2) establishment of a quorum consisting of proxies
100	100	and the votes of members or shareholders present;
101	101	(3) nomination and election procedures;
102	102	(4) procedures for selecting an independent election
103	103	auditor required by Section 67.0063;
104	104	(5) approval of the proxy and ballot form to be used;
105	105	and
106	106	(6) [(5)] validation of eligible voters, proxies,
107	107	ballots, and election results.
108	108	(d) An independent election auditor must be selected at each
109	109	annual meeting for the following annual meeting at which one or more
110	110	directors are scheduled to be elected. The independent auditor is
111	111	not required to be an experienced election judge or auditor and may
112	112	serve as an unpaid volunteer. At the time of selection and while
113	113	serving in the capacity of an independent election auditor, the
114	114	independent election auditor may not be associated with the
115	115	corporation as:
116	116	(1) an employee or independent contractor; or
117	117	(2) a director or candidate for director.
118	118	SECTION 4. Subchapter A, Chapter 67, Water Code, is amended
119	119	by adding Section 67.0085 to read as follows:
120	120	Sec. 67.0085. AUDIT REQUIREMENTS. Subchapter G, Chapter
121	121	49, applies to a corporation with 500 or more members in the same
122	122	manner that it applies to a district under that chapter. For
123	123	purposes of applying that subchapter to a corporation:
124	124	(1) "board" means the board of directors of a
125	125	corporation; and
126	126	(2) "district" means a corporation.
127	127	SECTION 5. A water supply or sewer service corporation
128	128	operating under Chapter 67, Water Code, is subject to the audit
129	129	requirements of Section 67.0085, Water Code, as added by this Act,
130	130	beginning with the first fiscal year of the corporation that begins
131	131	on or after September 1, 2009.
132	132	SECTION 6. The board of directors of a water supply or sewer
133	133	service corporation operating under Chapter 67, Water Code, shall
134	134	select an independent election auditor at least 30 days before the
135	135	scheduled date of the 2010 annual meeting of the corporation.
136	136	SECTION 7. This Act takes effect September 1, 2009.