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