By: Hinojosa S.B. No. 1188
(In the Senate - Filed February 24, 2023; March 9, 2023,
read first time and referred to Committee on Local Government;
April 6, 2023, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 7, Nays 0; April 6, 2023,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1188 By: Nichols
A BILL TO BE ENTITLED
AN ACT
relating to receivership of the Agua Special Utility District and
requirements for candidates for the board of directors of the Agua
Special Utility District.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 7201.055(b), Special District Local Laws
Code, is amended to read as follows:
(b) A candidate for a position on the board must:
(1) reside in the subdistrict represented by that
position; [and]
(2) be eligible to hold office under Section 141.001,
Election Code;
(3) file a campaign treasurer appointment form
described by Chapter 252, Election Code, with the Texas Ethics
Commission; and
(4) file each report required under Title 15, Election
Code, with the Texas Ethics Commission and the board.
SECTION 2. Section 7201.058, Special District Local Laws
Code, is amended by amending Subsection (a) and adding Subsections
(c), (d), and (e) to read as follows:
(a) A director shall [may] be removed from the board by a
majority of the other directors if the director:
(1) does not have at the time of appointment the
qualifications required by Section 7201.055(b) or is disqualified
from serving under Section 7201.059;
(2) does not complete the education program required
by Section 7201.054;
(3) does not meet the eligibility requirements under
Section 7201.072;
(4) fails to comply with Section 7201.071; [or]
(5) misses one-half or more of the regularly scheduled
meetings during the preceding 12 months;
(6) repeatedly fails to file an affidavit under
Section 553.002, Government Code, disclosing an interest in
property to be acquired with public money;
(7) repeatedly fails to file a conflicts disclosure
statement under Section 176.003, Local Government Code;
(8) fails to comply with Section 171.004, Local
Government Code;
(9) does not file the financial statement required of
state officers under Section 7201.056; or
(10) does not file a campaign treasurer appointment
form or a required report under Section 7201.055.
(c) A director shall be removed from the board by the other
directors if the director has been convicted of or has pleaded
guilty or nolo contendere to a civil or criminal offense of:
(1) bribery;
(2) embezzlement, extortion, or other theft of public
money;
(3) perjury;
(4) coercion of a public servant or voter;
(5) tampering with a governmental record;
(6) misuse of official information;
(7) abuse of official capacity; or
(8) conspiracy to commit or an attempted commission of
an offense described by Subdivisions (1)-(7).
(d) The board shall begin the process of notice and public
hearing for the removal of a director not later than the 30th day
after the date the board receives notice of a violation under this
section. On or before the 60th day after the date of the public
hearing, the remaining directors shall make a determination on
whether the violation occurred.
(e) Not later than the 30th day after the date the board
removes a director, the board shall begin the process of filling the
vacancy in accordance with Section 49.105, Water Code.
SECTION 3. Subchapter B, Chapter 7201, Special District
Local Laws Code, is amended by adding Section 7201.059 to read as
follows:
Sec. 7201.059. DISQUALIFICATION OF DIRECTORS. A director
is disqualified from serving as a director if:
(1) the director is a member or is appointed or elected
as a member of the governing body of another political subdivision;
(2) the director does not:
(A) meet the eligibility requirements under
Section 7201.072;
(B) file a campaign treasurer appointment form
required under Section 7201.055(b)(3); or
(C) file each report required under Section
7201.055(b)(4); or
(3) the board determines a relationship or employment
exists to which Section 49.052, Water Code, applies.
SECTION 4. Subchapter B-1, Chapter 7201, Special District
Local Laws Code, is amended by adding Section 7201.075 to read as
follows:
Sec. 7201.075. PUBLIC ACCESS TO DIRECTOR REPORTS. (a) The
district shall post to the district's Internet website and make
publicly available each report required to be filed with the Texas
Ethics Commission under Title 15, Election Code, by:
(1) a director;
(2) a candidate for the board; or
(3) a specific-purpose committee responsible for
supporting, opposing, or assisting a director or candidate for the
board.
(b) The district shall make available a report under
Subsection (a) not later than the fifth business day after the date
the report is filed with the board.
(c) This section may not be construed to limit public access
to information in a report described by Subsection (a) through
other electronic or print distribution.
(d) The district may remove the address of a person, except
for the city, state, and zip code, listed as having made a political
contribution to the member, candidate, or committee before posting
a report on the district's Internet website. The information must
remain available in a copy of the report maintained in the
district's office.
SECTION 5. Chapter 7201, Special District Local Laws Code,
is amended by adding Subchapter E to read as follows:
SUBCHAPTER E. RECEIVERSHIP OF DISTRICT; ENFORCEMENT
Sec. 7201.301. DEFINITIONS. In this subchapter:
(1) "Agent" means an individual who exercises
discretion in the planning, recommending, selecting, or
contracting of a vendor or contractor for the sale, lease, or
purchase of real property, goods, or services on behalf of the
district.
(2) "Commission" means the Texas Commission on
Environmental Quality.
Sec. 7201.302. APPOINTMENT OF RECEIVER. (a) At the request
of the commission, the attorney general shall bring an action for
the appointment of a receiver to collect the assets and carry on the
business of the district if the district:
(1) received three consecutive audit reports with
anything other than an unqualified or clean opinion;
(2) completed five consecutive fiscal years at a net
loss;
(3) has defaulted on more than one financial debt
obligation;
(4) has a director or agent who has been convicted of
or has pleaded guilty or nolo contendere to a civil or criminal
offense related to the management or governance of the district; or
(5) violates a final judgment issued by a district
court in an action brought by the attorney general under:
(A) this chapter;
(B) Chapter 7, 13, 49, or 65, Water Code;
(C) Chapter 341, Health and Safety Code;
(D) laws governing the selection, monitoring, or
review and evaluation of professional services, vendors, or
contractors for construction or improvement projects; or
(E) a rule adopted or order issued under any
statute listed in this subdivision.
(b) The court shall appoint a receiver if an appointment is
necessary to:
(1) guarantee the collection of assessments, fees,
penalties, or interest;
(2) guarantee continuous and adequate service to the
customers of the district; or
(3) prevent continued or repeated violations of a
court order or final commission order.
Sec. 7201.303. POWERS AND DUTIES OF RECEIVER. (a) The
receiver shall execute a bond in an amount to be set by the court to
ensure the proper performance of the receiver's duties.
(b) After appointment and execution of bond, the receiver
shall take possession of the assets of the district specified by the
court.
(c) Until discharged by the court, the receiver shall
perform the duties that the court directs to preserve the assets and
carry on the business of the district and shall strictly observe the
final order involved.
(d) The receiver has the powers and duties necessary to
ensure the continued operation of the district and the provision of
continuous and adequate services, including:
(1) meter reading;
(2) billing for services;
(3) collecting revenue;
(4) disbursing funds;
(5) accessing all system components; and
(6) requesting rate increases.
Sec. 7201.304. DISSOLUTION OF RECEIVERSHIP. The court may
dissolve the receivership and order the assets and control of the
business returned to the district if the district shows good cause
for the dissolution of the receivership.
Sec. 7201.305. EFFECT ON COMMISSION ENFORCEMENT AUTHORITY.
This section does not affect the authority of the commission to
pursue an enforcement action against the district or an affiliated
person.
SECTION 6. Not later than the 30th day after the effective
date of this Act, the board of directors of the Agua Special Utility
District shall adopt or update procedures for the removal of a
director under Section 7201.058, Special District Local Laws Code,
as amended by this Act.
SECTION 7. This Act takes effect September 1, 2023.
* * * * *