CHAPTER 49. PROVISIONS APPLICABLE TO ALL DISTRICTS

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WATER CODE

TITLE 4. GENERAL LAW DISTRICTS

CHAPTER 49. PROVISIONS APPLICABLE TO ALL DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 49.001. DEFINITIONS. (a) As used in this chapter:

(1) "District" means any district or authority created by

authority of either Sections 52(b)(1) and (2), Article III, or

Section 59, Article XVI, Texas Constitution, regardless of how

created. The term "district" shall not include any navigation

district or port authority created under general or special law,

any conservation and reclamation district created pursuant to

Chapter 62, Acts of the 52nd Legislature, 1951 (Article 8280-141,

Vernon's Texas Civil Statutes), or any conservation and

reclamation district governed by Chapter 36 unless a special law

creating the district or amending the law creating the district

states that this chapter applies to that district.

(2) "Commission" means the Texas Natural Resource Conservation

Commission.

(3) "Board" means the governing body of a district.

(4) "Executive director" means the executive director of the

commission.

(5) "Water supply corporation" means a nonprofit water supply or

sewer service corporation created or operating under Chapter 67.

(6) "Director" means either a supervisor or director appointed

or elected to the board.

(7) "Municipal solid waste" has the same meaning assigned by

Section 361.003, Health and Safety Code.

(8) "Special water authority" means a river authority as that

term is defined in Section 30.003, or a district created by a

special Act of the legislature that:

(A) is a provider of water or wastewater service to two or more

municipalities; and

(B) is governed by a board of directors appointed or designated

in whole or in part by the governor, the Texas Water Development

Board, or municipalities within its service area.

(9) "Potable water" means water that has been treated for public

drinking water supply purposes.

(10) "District facility" means tangible real and personal

property of the district, including any plant, equipment, means,

recreational facility as defined by Section 49.462, or

instrumentality owned, leased, operated, used, controlled,

furnished, or supplied for, by, or in connection with the

business or operations of a district. The term specifically

includes a reservoir or easement of a district.

(b) These definitions are for use in this chapter only and have

no effect on any other statute or code unless specifically

referenced by that statute or code.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 18.66, eff.

Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1354, Sec. 4, eff. Sept.

1, 1999; Acts 2003, 78th Leg., ch. 343, Sec. 1.

Sec. 49.002. APPLICABILITY. (a) Except as provided by

Subsection (b), this chapter applies to all general and special

law districts to the extent that the provisions of this chapter

do not directly conflict with a provision in any other chapter of

this code or any Act creating or affecting a special law

district. In the event of such conflict, the specific provisions

in such other chapter or Act shall control.

(b) This chapter does not apply to a district governed by

Chapter 36 unless a special law creating the district or amending

the law creating the district states that this chapter applies to

that district.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 5, eff.

Sept. 1, 1999.

Sec. 49.003. PENALTY. A district that fails to comply with the

filing provisions of this code may be subject to a civil penalty

of up to $100 per day for each day the district wilfully

continues to violate these provisions after receipt of written

notice of violation from the executive director by certified

mail, return receipt requested. The state may sue to recover the

penalty.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.004. PENALTY FOR VIOLATION OF DISTRICT RULES. (a) The

board may set reasonable civil penalties for the breach of any

rule of the district that shall not exceed the jurisdiction of a

justice court as provided by Section 27.031, Government Code.

(b) A penalty under this section is in addition to any other

penalty provided by the law of this state and may be enforced by

complaints filed in the appropriate court of jurisdiction in the

county in which the district's principal office or meeting place

is located.

it may, in the same action, recover reasonable fees for

attorneys, expert witnesses, and other costs incurred by the

district before the court. The amount of the attorney's fees

shall be fixed by the court.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

SUBCHAPTER B. CREATION

Sec. 49.010. ORDER OR ACT CREATING DISTRICT. Within 60 days

after the date a district is created, the district shall file

with the executive director a certified copy of the order or

legislative Act creating the district or authorizing its

creation, unless the district was created by order of the

commission.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.011. NOTICE APPLICABLE TO CREATION OF A DISTRICT BY THE

COMMISSION. (a) On receipt by the commission of all required

documentation associated with an application for creation of a

district by the commission under Chapter 36, 50, 51, 54, 55, 58,

65, or 66, the commission shall issue a notice indicating that

the application is administratively complete.

(b) The commission by rule shall establish a procedure for

public notice and hearing of applications. The rules must require

an applicant to publish the notice issued by the commission under

Subsection (a) once a week for two consecutive weeks in a

newspaper regularly published or circulated in the county where

the district is proposed to be located not later than the 30th

day before the date on which the commission may act on the

application.

public hearing if a public hearing is not requested by the

commission, the executive director, or an affected person in the

manner prescribed by commission rule during the 30 days following

the final publication of notice under Subsection (b).

(d) If the commission determines that a public hearing is

necessary, the commission shall advise all parties of the time

and place of the hearing. The commission is not required to

provide public notice of a hearing under this section.

Added by Acts 1997, 75th Leg., ch. 1070, Sec. 2, eff. Sept. 1,

1997.

SUBCHAPTER C. ADMINISTRATIVE PROVISIONS

Sec. 49.051. BOARD OF DIRECTORS. A district shall be governed

by its board, the number of which is otherwise provided by law.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.052. DISQUALIFICATION OF DIRECTORS. (a) A person is

disqualified from serving as a member of a board of a district

that includes less than all the territory in at least one county

and which, if located within the corporate area of a city or

cities, includes within its boundaries less than 75 percent of

the incorporated area of the city or cities, if that person:

(1) is related within the third degree of affinity or

consanguinity to a developer of property in the district, any

other member of the board, or the manager, engineer, attorney, or

other person providing professional services to the district;

(2) is an employee of any developer of property in the district

or any director, manager, engineer, attorney, or other person

providing professional services to the district or a developer of

property in the district in connection with the district or

property located in the district;

(3) is a developer of property in the district;

(4) is serving as an attorney, consultant, engineer, manager,

architect, or in some other professional capacity for the

district or a developer of property in the district in connection

with the district or property located in the district;

(5)(A) is a party to a contract with or along with the district

except for the purchase of public services furnished by the

district to the public generally; or

(B) is a party to a contract with or along with a developer of

property in the district relating to the district or to property

within the district, other than a contract limited solely to the

purpose of purchasing or conveying real property in the district

for the purpose of either establishing a permanent residence,

establishing a commercial business within the district, or

qualifying as a director; or

(6) during the term of office, fails to maintain the

qualifications required by law to serve as a director.

(b) Within 60 days after the board determines a relationship or

employment exists which constitutes a disqualification under

Subsection (a), it shall replace the person serving as a member

of the board with a person who would not be disqualified.

board and exercises the powers and duties of that office when

disqualified under the provisions of Subsection (a) is guilty of

a misdemeanor and, on conviction, shall be fined not less than

$100 nor more than $1,000.

(d) As used in this section, "developer of property in the

district" means any person who owns land located within a

district covered under this section and who has divided or

proposes to divide the land into two or more parts for the

purpose of laying out any subdivision or any tract of land or any

addition to any town or city, or for laying out suburban lots or

building lots, or any lots, streets, alleys, or parks or other

portions intended for public use, or the use of purchasers or

owners of lots fronting thereon or adjacent thereto.

(e) Any rights obtained by any third party through official

action of a board covered by this section are not impaired or

affected by the disqualification under this section of any member

of the board to serve, provided that the third party had no

knowledge at the time the rights were obtained of the fact that

the member of the board was disqualified to serve.

(f) This section shall not apply to special water authorities,

districts described in Section 49.181(h)(4), or a district where

the principal function of the district is to provide irrigation

water to agricultural lands or to provide nonpotable water for

any purpose.

(g) A board by unanimous vote of its remaining members may

remove a board member only if that board member has missed

one-half or more of the regular meetings scheduled during the

prior 12 months. Any board member so removed may file a written

appeal with the commission within 30 days after receiving written

notice of the board action. The commission may reinstate a

removed director if the commission finds that the removal was

unwarranted under the circumstances, including the reasons for

absences, the time and place of the meetings missed, the business

conducted at the meetings missed, and any other facts or

circumstances the commission may deem relevant.

(h) This subsection applies only to a district that is located

wholly within the boundaries of a municipality with a population

of more than 1.5 million, that is governed by Chapter 375, Local

Government Code, and that is governed by an appointed board

consisting of nine or more members. Notwithstanding Subsection

(f) or (g), a person is considered to have resigned from serving

as a member of the board if the person fails to attend three

consecutive meetings of the board. The remaining board members by

majority vote may waive the resignation under this subsection if

fairness requires that the absences be excused on the basis of

illness or other good cause.

(i) Notwithstanding any other law, a director is eligible to

serve on the board of a district governed by Chapter 375, Local

Government Code, regardless of the municipality in which the

director resides, if:

(1) the district is located within the boundaries of a

municipality with a population of more than 1.8 million; and

(2) all or a part of the district is located more than five

miles from the downtown city hall of that municipality.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 2003, 78th Leg., ch. 248, Sec. 6, eff. June

18, 2003.

Sec. 49.053. QUORUM. A majority of the membership of the board

constitutes a quorum for any meeting, and a concurrence of a

majority of the entire membership of the board is sufficient for

transacting any business of the district. This section does not

apply to special water authorities.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.054. OFFICERS. (a) After a district is created and the

directors have qualified, the board shall meet, elect a

president, vice-president, secretary, and any other officers or

assistant officers as the board may deem necessary, and begin the

discharge of its duties.

(b) After each directors election, the board shall meet and

elect officers.

district, presides at all meetings of the board, and shall

execute all documents on behalf of the district unless the board

by resolution authorizes the general manager or other employee of

the district to execute a document or documents on behalf of the

district. The vice-president shall act as president in case of

the absence or disability of the president. The secretary is

responsible for seeing that all records and books of the district

are properly kept and may attest the president's signature on

documents.

(d) Repealed by Acts 2003, 78th Leg., ch. 1276, Sec. 18.007.

(e) The board may appoint another director, the general manager,

or any employee as assistant or deputy secretary to assist the

secretary, and any such person shall be entitled to certify as to

the authenticity of any record of the district, including but not

limited to all proceedings relating to bonds, contracts, or

indebtedness of the district.

(f) After any election or appointment of a director, a district

shall notify the executive director within 30 days after the date

of the election or appointment of the name and mailing address of

the director chosen and the date that director's term of office

expires. The executive director shall provide forms to the

district for such purpose.

(g) This section does not apply to special water authorities.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1259, Sec. 1, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1354, Sec. 6, eff. Sept.

1, 1999; Acts 2001, 77th Leg., ch. 69, Sec. 5, eff. May 14, 2001;

Acts 2001, 77th Leg., ch. 1423, Sec. 1, eff. June 17, 2001; Acts

2003, 78th Leg., ch. 1276, Sec. 18.007, eff. Sept. 1, 2003.

Sec. 49.055. SWORN STATEMENT, BOND, AND OATH OF OFFICE. (a) As

soon as practicable after a director is elected or appointed,

that director shall make the sworn statement prescribed by the

constitution for public office.

(b) As soon as practicable after a director has made the sworn

statement, and before beginning to perform the duties of office,

that director shall take the oath of office prescribed by the

constitution for public officers.

director shall execute a bond for $10,000 payable to the district

and conditioned on the faithful performance of that director's

duties. All bonds of the directors shall be approved by the board

and paid for by the district.

(d) The sworn statement shall be filed as prescribed by the

constitution. The bond and oath shall be filed with the district

and retained in its records. A duplicate original of the oath

shall also be filed with the secretary of state within 10 days

after its execution and need not be filed before the new director

begins to perform the duties of office.

(e) This section does not apply to special water authorities.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 249, Sec. 2, eff. Aug.

30, 1999.

Sec. 49.056. GENERAL MANAGER. (a) The board may employ or

contract with a person to perform such services as general

manager for the district as the board may from time to time

specify. The board may delegate to the general manager full

authority to manage and operate the affairs of the district

subject only to orders of the board.

(b) The board may delegate to the general manager the authority

to employ all persons necessary for the proper handling of the

business and operation of the district and to determine the

compensation to be paid all employees other than the general

manager.

employed as general manager of the district, but the compensation

of a general manager who also serves as a director shall be

established by the other directors.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.057. MANAGEMENT OF DISTRICT. (a) The board shall be

responsible for the management of all the affairs of the

district. The district shall employ or contract with all persons,

firms, partnerships, corporations, or other entities, public or

private, deemed necessary by the board for the conduct of the

affairs of the district, including, but not limited to,

engineers, attorneys, financial advisors, operators, bookkeepers,

tax assessors and collectors, auditors, and administrative staff.

(b) The board shall adopt an annual budget. All district

employees are employed at the will of the district unless the

district and employee execute a written employment contract.

consultants.

(d) In selecting attorneys, engineers, auditors, financial

advisors, or other professional consultants, the district shall

follow the procedures provided in Subchapter A, Chapter 2254,

Government Code (Professional Services Procurement Act).

(e) Except as provided by Subsection (i), the board shall

require an officer, employee, or consultant, including a

bookkeeper, financial advisor, or system operator, who routinely

collects, pays, or handles any funds of the district to furnish

good and sufficient bond, payable to the district, in an amount

determined by the board to be sufficient to safeguard the

district. The board may require a consultant who does not

routinely collect, pay, or handle funds of the district to

furnish a bond. The bond shall be conditioned on the faithful

performance of that person's duties and on accounting for all

funds and property of the district. Such bond shall be signed or

endorsed by a surety company authorized to do business in the

state.

(f) The board may pay the premium on surety bonds required of

officials, employees, or consultants of the district out of any

available funds of the district, including proceeds from the sale

of bonds.

(g) The board may adopt bylaws to govern the affairs of the

district to perform its purposes. The board may by resolution

authorize its general manager or other employee to execute

documents on behalf of the district.

(h) The board shall also have the right to purchase all

materials, supplies, equipment, vehicles, and machinery needed by

the district to perform its purposes.

(i) The board may obtain or require an officer, employee, or

consultant of the district to obtain insurance or coverage under

an interlocal agreement that covers theft of district funds by

officers, employees, or consultants of the district in lieu of

requiring a bond under Subsection (e) if the board determines

that the insurance or coverage under an interlocal agreement

would adequately protect the interests of the district.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 3, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1354, Sec. 7, eff. Sept.

1, 1999; Acts 2001, 77th Leg., ch. 69, Sec. 2, eff. May 14, 2001;

Acts 2001, 77th Leg., ch. 1423, Sec. 2, eff. June 17, 2001; Acts

2003, 78th Leg., ch. 1276, Sec. 18.008, eff. Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

868, Sec. 1, eff. June 17, 2005.

Sec. 49.058. CONFLICTS OF INTEREST. A director of a district is

subject to the provisions of Chapter 171, Local Government Code,

relating to the regulation of conflicts of interest of officers

of local governments.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.059. DISQUALIFICATION OF TAX ASSESSOR AND COLLECTOR.

(a) No person may serve as tax assessor and collector of a

district providing potable water or sewer utility services to

household users if that person:

(1) is related within the third degree of affinity or

consanguinity to any developer of property in the district, a

member of the board, or the manager, engineer, or attorney for

the district;

(2) is or was within two years immediately preceding the

assumption of assessment and collection duties with the district

an employee of any developer of property in the district or any

director, manager, engineer, or attorney for the district;

(3) owns an interest in or is employed by any corporation

organized for the purpose of tax assessment and collection

services, a substantial portion of the stock of which is owned by

a developer of property within the district or any director,

manager, engineer, or attorney for the district; or

(4) is directly or through a corporation developing land in the

district or is a director, engineer, or attorney for the

district.

(b) Within 60 days after the board determines a relationship or

employment exists which constitutes a disqualification under

Subsection (a), it shall replace the person serving as tax

assessor and collector with a person who would not be

disqualified.

Subsection (a) is guilty of a misdemeanor and on conviction shall

be fined not less than $100 nor more than $1,000.

(d) As used in this section, "developer of property in the

district" has the same meaning as in Section 49.052(d).

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.060. FEES OF OFFICE; REIMBURSEMENT. (a) A director is

entitled to receive fees of office of not more than $150 a day

for each day the director actually spends performing the duties

of a director. In this subsection, "performing the duties of a

director" means substantive performance of the management or

business of the district, including participation in board and

committee meetings and other activities involving the substantive

deliberation of district business and in pertinent educational

programs. The phrase does not include routine or ministerial

activities such as the execution of documents, self-preparation

for meetings, or other activities requiring a minimal amount of

time.

(a-1) A district, by resolution of the board, shall set a limit

on the fees of office that a director may receive in a year.

Except for a district that is a special water authority engaged

in the distribution and sale of electric energy to the public, a

district may not set the annual limit at an amount greater than

$7,200.

(b) Each director is also entitled to receive reimbursement of

actual expenses reasonably and necessarily incurred while

engaging in activities on behalf of the district.

reimbursement for expenses, each director shall file with the

district a verified statement showing the number of days actually

spent in the service of the district and a general description of

the duties performed for each day of service.

(d) Repealed by Acts 2003, 78th Leg., ch. 736, Sec. 2.

(e) Section 49.002 notwithstanding, in all areas of conflict the

provisions of this section shall take precedence over all prior

statutory enactments. If the enactment of this section results in

an increase in the fees of office for any district, that

district's fees of office shall not increase unless the board

adopts a resolution authorizing payment of the higher fees.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 695, Sec. 1, eff.

Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1423, Sec. 3, eff. June

17, 2001; Acts 2003, 78th Leg., ch. 736, Sec. 1, 2, eff. June 20,

2003.

Sec. 49.061. SEAL. The directors shall adopt a seal for the

district.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.062. OFFICES AND MEETING PLACES. (a) The board shall

designate from time to time and maintain one or more regular

offices for conducting the business of the district and

maintaining the records of the district. Such offices may be

located either inside or outside the district's boundaries as

determined in the discretion of the board.

(b) The board shall designate one or more places inside or

outside the district for conducting the meetings of the board.

The meeting place may be a private residence or office, provided

that the board, in its order establishing the meeting place,

declares the same to be a public place and invites the public to

attend any meeting of the board. If the board establishes a

meeting place or places outside the district, it shall give

notice of the location or locations by filing a true copy of the

resolution establishing the location or locations of the meeting

place or places with the commission and also by publishing notice

of the location or locations in a newspaper of general

circulation in the district. If the location of any of the

meeting places outside the district is changed, notice of the

change shall be given in the same manner.

district, on written request of at least five of those electors,

the board shall designate a meeting place and hold meetings

within the district if it determines that the meeting place used

by the district deprives the residents of a reasonable

opportunity to attend district meetings. On the failure to

designate the location of the meeting place within the district,

five electors may petition the commission to designate a

location. If it determines that the meeting place used by the

district deprives the residents of a reasonable opportunity to

attend district meetings, the commission may designate a meeting

place inside or outside the district which is reasonably

available to the public and require that the meetings be held at

such place. After the next election, the board may designate

different meeting places, including one located outside the

boundaries of the district.

(d) Two or more districts may designate and share offices and

meeting places. This section does not apply to special water

authorities.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.063. NOTICE OF MEETINGS. Notice of meetings of the

board shall be given as set forth in the open meetings law,

Chapter 551, Government Code, except that if a district does not

have a meeting place within the district, the district shall post

notice of its meeting at a public place within the district

specified by the board in a written resolution, rather than at

its administrative office. The board shall specify such public

place to be a bulletin board or other place within the district

which is reasonably available to the public. Neither failure to

provide notice of a regular meeting nor an insubstantial defect

in notice of any meeting shall affect the validity of any action

taken at the meeting.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.064. MEETINGS. The board shall hold such regular and

special meetings as may be necessary for the proper conduct of

the district's business. All meetings shall be conducted in

accordance with the open meetings law, Chapter 551, Government

Code. A meeting of a committee of the board, or a committee

composed of representatives of more than one board, where less

than a quorum of any one board is present is not subject to the

provisions of the open meetings law, Chapter 551, Government

Code.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.065. RECORDS. (a) The board shall keep a complete

account of all its meetings and proceedings and shall preserve

its minutes, contracts, records, notices, accounts, receipts, and

other records in a safe place.

(b) The records of each district are the property of the

district and are subject to the open records law, Chapter 552,

Government Code.

disposition of the records of each district is subject to the

requirements of Chapter 201, Local Government Code, and rules

adopted under that chapter.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.066. SUITS. (a) A district may sue and be sued in the

courts of this state in the name of the district by and through

its board. A suit for contract damages may be brought against a

district only on a written contract of the district approved by

the district's board. All courts shall take judicial notice of

the creation of the district and of its boundaries.

(b) Any court in the state rendering judgment for debt against a

district may order the board to levy, assess, and collect taxes

or assessments to pay the judgment.

be the agent of the district on whom process, notice, or demand

required or permitted by law to be served upon the district may

be served.

(d) Except as provided in Subsection (e), no suit may be

instituted in any court of this state contesting:

(1) the validity of the creation and boundaries of a district

created under this code;

(2) any bonds or other obligations created under this code; or

(3) the validity or the authorization of a contract with the

United States by the district.

(e) The matters listed in Subsection (d) may be judicially

inquired into at any time and determined in any suit brought by

the State of Texas through the attorney general. The action shall

be brought on good cause shown, except where otherwise provided

by other provisions of this code or by the Texas Constitution. It

is specifically provided, however, that no such proceeding shall

affect the validity of or security for any bonds or other

obligations theretofore issued by a district if such bonds or

other obligations have been approved by the attorney general as

provided by Section 49.184.

(f) A district or water supply corporation shall not be required

to give bond for appeal, injunction, or costs in any suit to

which it is a party and shall not be required to deposit more

than the amount of any award in any eminent domain proceeding.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 8, eff.

Sept. 1, 1999.

Sec. 49.067. CONTRACTS. (a) A district shall contract, and be

contracted with, in the name of the district.

(b) Notwithstanding any other law, a contract for technical,

scientific, legal, fiscal, or other professional services must be

approved by the board unless specifically delegated by board

action. The terms and conditions of such a contract, including

the terms for payment, are subject to the decision of the board

unless specifically delegated by board action. The board through

such action cannot abrogate its fiscal responsibility.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 2003, 78th Leg., ch. 248, Sec. 7, eff. June

18, 2003.

Sec. 49.068. CONTRACTS WITH GOVERNMENTAL AGENCIES. (a) The

provisions of this chapter pertaining to bids and the Local

Government Code notwithstanding, a district may purchase property

from any governmental entity by negotiated contract without the

necessity of securing appraisals or advertising for bids.

(b) The provisions of other law or a home-rule municipal charter

notwithstanding, a municipality may contract with a district. The

term of a contract under this subsection may be of unlimited

duration.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 2003, 78th Leg., ch. 248, Sec. 8, eff. June

18, 2003.

Sec. 49.069. EMPLOYEE BENEFITS. (a) The board may provide for

and administer retirement, disability, and death compensation

funds for the employees of the district.

(b) The board may establish a public retirement system in

accordance with the provisions of Chapter 810, Government Code.

The board may also provide for a deferred compensation plan

described by Section 457 of the Internal Revenue Code of 1986 (26

U.S.C. Section 457).

to its employees as part of the compensation paid to the officers

and employees and may adopt any plan, rule, or regulation in

connection with it and amend or change the plan, rule, or

regulation as it may determine.

(d) The board may establish a sick leave pool for employees of

the district in the same manner as that authorized for the

creation of a sick leave pool for state employees by Subchapter

A, Chapter 661, Government Code.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 9, eff.

Sept. 1, 1999.

Sec. 49.070. WORKERS' COMPENSATION. The board may become a

subscriber under Title 5, Labor Code (Texas Workers' Compensation

Act), with any insurance company authorized to write the policies

in the State of Texas.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.071. DISTRICT NAME CHANGE. (a) On petition by a

district showing reasonable grounds for a name change, the

commission by order may change the name of the district to the

name requested by the district. The new name must be generally

descriptive of the location of the district followed by the type

of district as provided by the title of the chapter of the Water

Code governing the district. If a district is located wholly

within one county that contains more than one district of that

type, the district may be differentiated, if necessary, by adding

to the new name the proper consecutive number. The new name may

not be the same as the name of any other district in the county.

(b) A name change takes effect on the date of issuance of the

commission order making the name change.

the commission order making the name change, the district shall

publish notice of the name change in a newspaper or newspapers of

general circulation in the county or counties in which the

district is located. Within that same period, the district shall

also give notice of the name change by mail to utility customers

or permittees, if any, and, to the extent practicable, to the

holders of bonds, obligations, and other indebtedness of the

district. Failure of the district to comply with this subsection

does not affect the validity of the name change.

(d) A change in the name of a district does not affect bonds,

obligations, or other indebtedness of the district existing

before the name change occurred.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.072. LIMITATION ON FUTURE EMPLOYMENT. (a) A person who

has served as a director of a district may not contract with that

district or be employed by an organization to which the district

has awarded a contract for one year following the date on which

the person ceased to serve as a director.

(b) This section does not apply to a person who has served as a

director of a district that performs agricultural irrigation

functions under Chapter 51, 55, or 58 if the person, when serving

as a director, was required to own land as a qualification for

office.

Added by Acts 2003, 78th Leg., ch. 469, Sec. 1, eff. Sept. 1,

2003.

SUBCHAPTER D. ELECTION PROVISIONS

Sec. 49.101. GENERAL. All elections shall be generally

conducted in accordance with the Election Code except as

otherwise provided for by this code. Write-in candidacies for any

district office shall be governed by Subchapter C, Chapter 146,

Election Code.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.102. CONFIRMATION AND DIRECTOR ELECTION. (a) Before

issuing any bonds or other obligations, an election shall be held

within the boundaries of the proposed district to determine if

the proposed district shall be established and, if the directors

of the district are required by law to be elected, to elect

permanent directors.

(b) Notice of a confirmation or director election shall state

the day and place or places for holding the election, the

propositions to be voted on, and the number of directors to be

voted on.

provide for voting "For District" and "Against District." Ballots

for a directors election shall provide the names of the persons

appointed by the governing body who qualified and are serving as

temporary directors at the time the election is called. The

ballots shall also have blank places after the names of the

temporary directors in which a voter may write the names of other

persons for directors.

(d) Immediately after the confirmation and director election,

the presiding judge shall take returns of the results to the

temporary board. The temporary board shall canvass the returns

and declare the results at the earliest practicable time.

(e) If a majority of the votes cast in the election favor the

creation of the district, then the temporary board shall declare

that the district is created and enter the result in its minutes.

If a majority of the votes cast in the election are against the

creation of the district, the temporary board shall declare that

the district was defeated and enter the result in its minutes. A

copy of the order shall be filed with the commission.

(f) The order canvassing the results of the confirmation

election shall contain a description of the district's boundaries

and shall be filed with the executive director and in the deed

records of the county or counties in which the district is

located.

(g) The temporary board shall also declare the persons receiving

the highest number of votes for directors to have been elected as

permanent directors.

(h) Unless otherwise agreed, the directors shall decide the

initial terms of office by lot, with a simple majority of

directors serving until the second succeeding directors election

and the remaining directors serving until the next directors

election.

(i) A district, at an election required under Subsection (a),

may submit to the qualified voters of the district the

proposition of whether a plan as authorized by Section 49.351

should be implemented or entered into by the district.

(j) The provisions of this section shall not be applicable to

any district exercising the powers of Chapter 375, Local

Government Code, or any district created by a special Act of the

legislature that does not require a confirmation election.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 2001, 77th Leg., ch. 1423, Sec. 4, eff.

June 17, 2001.

Sec. 49.103. TERMS OF OFFICE OF DIRECTORS. (a) Except as

provided by Section 49.102, the members of the board of a

district shall serve for four-year terms.

(b) An election shall be held on the uniform election date,

established by the Election Code, in May of each even-numbered

year to elect the appropriate number of directors.

director's office, in which case directors shall thereafter be

elected by position and not at large.

(d) A district may provide for the election of all directors, or

a majority of directors, from single-member districts, which

shall be geographically described within the boundaries of the

district in a manner that is equitable for the electors within

such districts and within the district generally.

(e) Section 49.002 notwithstanding, in all areas of conflict the

provisions of Subsections (a) and (b) shall take precedence over

all prior statutory enactments.

(f) This section does not apply to:

(1) any special law district or authority that is not required

by the law creating the district or authority to elect its

directors by the public; or

(2) a special utility district operating under Chapter 65.

(g) A district may, if required under this section to change the

terms of office of directors to four-year terms or to change the

date on which the district holds a director election, extend the

terms of office of directors serving the district on the

effective date of H.B. No. 2236, Acts of the 75th Legislature,

Regular Session, 1997, to continue the terms until the next

appropriate election date in an even-numbered year. A district

that is required under this section to change the terms of office

of directors to staggered terms may require directors of the

district to draw lots to achieve staggered terms.

(h) If authorized by the board in the proceedings calling a

director election, the secretary of the board or the secretary's

designee, on receipt of the certification required by Section

2.052(b), Election Code, shall post notice that the election is

not to be held. The notice must be posted, on or before the

commencement of early voting, at each polling place that would

have been used in the election. If the notice is timely posted:

(1) the board or the board's designee is not required to:

(A) post or publish notice of the election;

(B) prepare or print ballots and election materials; or

(2) the board shall meet at the earliest practicable time to

declare each unopposed candidate elected to office.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 4, eff.

Sept. 1, 1997; Acts 2001, 77th Leg., ch. 340, Sec. 5, eff. Sept.

1, 2001; Acts 2003, 78th Leg., ch. 248, Sec. 9, eff. June 18,

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

471, Sec. 5, eff. October 1, 2005.

Sec. 49.104. ALTERNATIVE ELECTION PROCEDURES. (a)

Notwithstanding the provisions and requirements of the Election

Code and general laws, any two or more districts situated in the

same county and in which substantially all of the land is being

or has been developed as part of a single community development

plan and which are served by common water supply and waste

disposal systems may by mutual agreement designate a common

election office and common early and regular polling places

within one or more of the districts, but outside the boundaries

of one or more of the districts, for the conduct of director

election proceedings and early and regular balloting in director

elections. This alternative election procedure may only be used

if the common election office and polling places so designated:

(1) are within buildings open to the public;

(2) are within the boundaries of at least one of the districts;

(3) meet the requirements of the Election Code and general laws

as polling places; and

(4) are located not more than five miles from any portion of the

boundaries of any of the participating districts.

(b) Such districts may also agree on and designate a common

election officer and common early and regular voting officials

for some or all of the director elections to be simultaneously

conducted at a common location, any of whom may be nonelective

employees of one or more of the districts, so long as the early

and regular voting officials are qualified voters within at least

one of the districts.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.105. VACANCIES. (a) Except as otherwise provided in

this code, a vacancy on the board and in other offices shall be

filled for the unexpired term by appointment of the board not

later than the 60th day after the date the vacancy occurs.

(b) If the board has not filled a vacancy by appointment before

the 61st day after the date the vacancy occurs, a petition,

signed by more than 10 percent of the registered voters of the

district, requesting the board to fill the vacancy by appointment

may be presented to the board.

majority or if a vacancy continues beyond the 90th day after the

date the vacancy occurs, the vacancy or vacancies shall be filled

by appointment by the commission if the district is required by

Section 49.181 to obtain commission approval of its bonds or by

the county commissioners court if the district was created by the

county commissioners court, regardless of whether a petition has

been presented to the board under Subsection (b). An appointed

director shall serve for the unexpired term of the director he or

she is replacing.

(d) In the event of a failure to elect one or more members of

the board of a district resulting from the absence of, or failure

to vote by, the qualified voters in the district, the current

members of the board holding the positions not filled at such

election shall be deemed to have been reelected and shall serve

an additional term of office.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 10, eff.

Sept. 1, 1999.

Sec. 49.106. BOND ELECTIONS. (a) Before an election is held to

authorize the issuance of bonds, other than refunding bonds,

there shall be filed in the office of the district and open to

inspection by the public an engineer's report covering the land,

improvements, facilities, plants, equipment, and appliances to be

purchased or constructed and their estimated cost, together with

maps, plats, profiles, and data fully showing and explaining the

report. The engineer's report is not:

(1) part of the proposition or propositions to be voted on; or

(2) a contract with the voters.

(b) Notice of a bond election shall contain the proposition or

propositions to be voted on, which includes the estimate of the

probable cost of design, construction, purchase, and acquisition

of improvements and additions thereto, and incidental expenses

connected with such improvements and the issuance of bonds.

district election. The bond election may be called by a separate

election order or as a part of any other election order. The

board may submit multiple purposes in a single proposition at an

election.

(d) A bond election may be called as a result of an agreement to

annex additional territory into the district.

(e) A district's authorization to issue bonds resulting from an

election held under this section, or any other law that allows

for the qualified voters of a district to authorize the issuance

of bonds by a district, remains in effect after the election

unless the district is dissolved or is annexed by another

district.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 5, eff.

Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1423, Sec. 5, eff. June

17, 2001; Acts 2003, 78th Leg., ch. 248, Sec. 10, eff. June 18,

2003.

Sec. 49.107. OPERATION AND MAINTENANCE TAX. (a) A district may

levy and collect a tax for operation and maintenance purposes,

including funds for planning, constructing, acquiring,

maintaining, repairing, and operating all necessary land, plants,

works, facilities, improvements, appliances, and equipment of the

district and for paying costs of proper services, engineering and

legal fees, and organization and administrative expenses.

(b) An operation and maintenance tax may not be levied by a

district until it is approved by a majority of the electors

voting at an election held for that purpose. After such a tax has

been authorized by the district's voters, the board shall be

authorized to levy the tax and have it assessed and collected as

other district taxes.

same time and in conjunction with any other district election.

The election may be called by a separate election order or as

part of any other election order.

(d) The proposition in an operation and maintenance tax election

may be for a specific maximum rate or for an unlimited rate.

(e) If a district has any surplus operation and maintenance tax

funds that are not needed for the purposes for which they were

collected, the funds may be used for any lawful purpose.

(f) Before a district reimburses a developer of property in the

district, as that term is defined in Section 49.052(d), or its

assigns, from operation and maintenance tax funds, for planning,

constructing, or acquiring facilities, the district shall obtain

approval by the executive director.

(g) Sections 26.04, 26.05, and 26.07, Tax Code, do not apply to

a tax levied and collected under this section or an ad valorem

tax levied and collected for the payment of the interest on and

principal of bonds issued by a district.

(h) To the extent authorized by Section 59, Article XVI, Texas

Constitution, an operation and maintenance tax to be used for

recreational facilities, as defined by Section 49.462, levied by

a district located in a county with a population of more than 3.3

million or in a county adjacent to that county may not exceed 10

cents per $100 of assessed valuation of taxable property in the

district.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 2001, 77th Leg., ch. 1423, Sec. 6, eff.

June 17, 2001; Acts 2003, 78th Leg., ch. 343, Sec. 2.

Sec. 49.108. CONTRACT ELECTIONS. (a) A contract may provide

that the district will make payment under the contract from

proceeds from the sale of notes or bonds, from taxes, or from any

other income of the district or any combination of these.

(b) A district may make payments under a contract from taxes

other than operation and maintenance taxes after the provisions

of the contract have been approved by a majority of the qualified

voters voting at an election held for that purpose. A contract

approved by the qualified voters of a district may contain a

provision stating that the contract may be modified or amended by

the board without voter approval.

conjunction with any other district election. The election may be

called by a separate election order or as part of any other

election order.

(d) A contract approved by the voters will constitute an

obligation against the taxing power of the district to the extent

provided in the contract.

(e) A district that is required under Section 49.181 to obtain

approval by the commission of the district's issuance of bonds

must obtain approval by the executive director before the

district enters into an obligation under this section to collect

tax for debt that exceeds three years. This subsection does not

apply to contract taxes that are levied to pay for a district's

share of bonds that have been issued by another district and

approved by the commission or bonds issued by a municipality.

(f) Sections 26.04, 26.05, and 26.07, Tax Code, do not apply to

a tax levied and collected for payments made under a contract

approved in accordance with this section.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 6, eff.

Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1160, Sec. 1, eff. June

15, 2001; Acts 2001, 77th Leg., ch. 1423, Sec. 7, eff. June 17,

2001.

SUBCHAPTER E. FISCAL PROVISIONS

Sec. 49.151. EXPENDITURES. (a) Except as hereinafter provided,

a district's money may be disbursed only by check, draft, order,

or other instrument that shall be signed by at least a majority

of the directors.

(b) The board may by resolution allow the general manager,

treasurer, bookkeeper, or other employee of the district to sign

disbursements.

transferred by federal reserve wire system. The board by

resolution may allow the wire transfers to accounts in the name

of the district or accounts not in the name of the district.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 2001, 77th Leg., ch. 1423, Sec. 8, eff.

June 17, 2001.

Sec. 49.152. PURPOSES FOR BORROWING MONEY. The district may

issue bonds, notes, or other obligations to borrow money for any

corporate purpose or combination of corporate purposes only in

compliance with the methods and procedures provided by this

chapter or by other applicable law.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 11, eff.

Sept. 1, 1999.

Sec. 49.153. REVENUE NOTES. (a) The board, without the

necessity of an election, may borrow money on negotiable or

nonnegotiable notes of the district to be paid solely from the

revenues derived from the ownership of all or any designated part

of the district's works, plants, improvements, facilities, or

equipment after deduction of the reasonable cost of maintaining

and operating the facilities.

(b) The notes may be first or subordinate lien notes within the

discretion of the board, but no obligation may ever be a charge

on the property of the district or on taxes levied or collected

by the district but shall be solely a charge on the revenues

pledged for the payment of the obligation. No part of the

obligation may ever be paid from taxes levied or collected by the

district.

execute a note for a term longer than three years unless the

commission issues an order approving the note.

(d) This section does not apply to special water authorities.

(e) Subsection (c) does not apply to:

(1) a note issued to and approved by the:

(A) Farmers Home Administration;

(B) United States Department of Agriculture;

(D) North American Development Bank; or

(2) a district described by Section 49.181(h).

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1070, Sec. 7, eff.

Sept. 1, 1997; Acts 2003, 78th Leg., ch. 248, Sec. 11, eff. June

18, 2003; Acts 2003, 78th Leg., ch. 608, Sec. 7, eff. June 20,

2003.

Sec. 49.154. BOND ANTICIPATION NOTES; TAX ANTICIPATION NOTES.

(a) The board may declare an emergency in the matter of funds

not being available to pay principal of and interest on any bonds

of the district payable in whole or in part from taxes or to meet

any other needs of the district and may issue negotiable tax

anticipation notes or negotiable bond anticipation notes to

borrow the money needed by the district without advertising or

giving notice of the sale. Bond anticipation notes and tax

anticipation notes shall mature within one year of their date.

(b) Tax anticipation notes may be issued for any purpose for

which the district is authorized to levy taxes, and tax

anticipation notes shall be secured with the proceeds of taxes to

be levied by the district in the succeeding 12-month period. The

board may covenant with the purchasers of the notes that the

board will levy a sufficient tax to pay the principal of and

interest on the notes and pay the costs of collecting the taxes.

which bonds of the district may have previously been voted or may

be issued for the purpose of refunding previously issued bond

anticipation notes. A district may covenant with the purchasers

of the bond anticipation notes that the district will use the

proceeds of sale of any bonds in the process of issuance for the

purpose of refunding the bond anticipation notes, in which case

the board will be required to use the proceeds received from sale

of the bonds in the process of issuance to pay principal,

interest, or redemption price on the bond anticipation notes.

(d) Districts required to seek commission approval of bonds must

have an application for such approval on file with the commission

prior to the issuance of bond anticipation notes.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995.

Sec. 49.155. PAYMENT OF EXPENSES. (a) The district may pay out

of bond proceeds or other available funds of the district all

expenses of the district authorized by this section, including

expenses reasonable and necessary to effect the issuance, sale,

and delivery of bonds as determined by the board, including, but

not limited to, the following:

(1) interest during construction;

(2) capitalized interest not to exceed three years' interest;

(3) reasonable and necessary reserve funds not to exceed two

years' interest on the bonds;

(4) interest on funds advanced to the district;

(5) financial advisor, bond counsel, attorney, and other

consultant fees;

(6) paying agent, registrar, and escrow agent fees;

(7) right-of-way acquisition;

(8) underwriter's discounts or premiums;

(9) engineering fees, including surveying expenses and plan

review fees;

(10) commission and attorney general fees;

(11) printing costs;

(12) all organizational, administrative, and operating costs

during creation and construction periods;

(13) the cost of investigation and making plans, including

preliminary plans and associated engineering reports;

(14) land required for stormwater control;

(15) costs associated with requirements for federal stormwater

permits; and

(16) costs associated with requirements for endangered species

permits.

(b) For purposes of this section, construction periods shall

mean any periods during which the district is constructing its

facilities or there is construction by third parties of above

ground improvements within the district, but in no event longer

than five years.

the purposes in Subsection (a) and may be charged interest on

such funds.

(d) These payments may be made from money obtained from the

issuance of notes or the sale of bonds issued by the district or

out of maintenance taxes or other revenues of the district.

Added by Acts 1995, 74th Leg., ch. 715, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 1354, Sec. 12, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1423, Sec. 9, eff. June

17, 2001.

Sec. 49.156. DEPOSITORY. (a) The board, by order or

resolution, shall designate one or more banks or savings

associations within the state to serve as the depository for the

funds of the district. The board shall not be required to

advertise or solicit bids in selecting its depositories.

(b) To the extent that funds in the depository banks or savings

associations are not insured by the Federal Deposit Insurance

Corporation, they shall be secured in the manner provided by law

for the security of funds by Chapter 2257, Government Code

(Public Funds Collateral Act).

supervise the substitution of securities pledged to secure the

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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