H.B. No. 1901

	AN ACT
	relating to the applicability of provisions concerning bond
	approval by the Texas Commission on Environmental Quality to
	certain water entities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 49.181(a) and (h), Water Code, are
	amended to read as follows:
	(a)  A district may not issue bonds unless the commission
	determines that the project to be financed by the bonds is feasible
	and issues an order approving the issuance of the bonds.  This
	section does not apply to:
	(1)  refunding bonds if the commission issued an order
	approving the issuance of the bonds or notes that originally
	financed the project;
	(2)  refunding bonds that are issued by a district
	under an agreement between the district and a municipality allowing
	the issuance of the district's bonds to refund bonds issued by the
	municipality to pay the cost of financing facilities;
	(3)  bonds issued to and approved by the Farmers Home
	Administration, the United States Department of Agriculture, the
	North American Development Bank, or the Texas Water Development
	Board; [or]
	(4)  refunding bonds issued to refund bonds described
	by Subdivision (3); or
	(5)  bonds issued by a public utility agency created
	under Chapter 572, Local Government Code, any of the public
	entities participating in which are districts if at least one of
	those districts is a district described by Subsection (h)(1)(E).
	(h)  This section does not apply to:
	(1)  a district if:
	(A) [(1)]  the district's boundaries include one
	entire county;
	(B) [(2)]  the district was created by a special
	Act of the legislature and:
	(i) [(A)]  the district is located entirely
	within one county;
	(ii) [(B)]  the district is located entirely
	within one or more home-rule municipalities;
	(iii) [(C)]  the total taxable value of the
	real property and improvements to the real property zoned by one or
	more home-rule municipalities for residential purposes and located
	within the district does not exceed 25 percent of the total taxable
	value of all taxable property in the district, as shown by the most
	recent certified appraisal tax roll prepared by the appraisal
	district for the county; and
	(iv) [(D)]  the district was not required by
	law to obtain commission approval of its bonds before the effective
	date of this section;
	(C) [(3)]  the district is a special water
	authority;
	(D) [(4)]  the district is governed by a board of
	directors appointed in whole or in part by the governor, a state
	agency, or the governing body or chief elected official of a
	municipality or county and does not provide, or propose to provide,
	water, sewer, drainage, reclamation, or flood control services to
	residential retail or commercial customers as its principal
	function; or
	(E) [(5)]  the district on September 1, 2003:
	(i) [(A)]  is a municipal utility district
	that includes territory in only two counties;
	(ii) [(B)]  has outstanding long-term
	indebtedness that is rated BBB or better by a nationally recognized
	rating agency for municipal securities; and
	(iii) [(C)]  has at least 5,000 active water
	connections; or
	(2)  a public utility agency created under Chapter 572,
	Local Government Code, any of the public entities participating in
	which are districts if at least one of those districts is a district
	described by Subdivision (1)(E).
	SECTION 2.  Section 49.052(f), Water Code, is amended to
	read as follows:
	(f)  This section shall not apply to special water
	authorities, districts described in Section 49.181(h)(1)(D)
	[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.
	SECTION 3.  Section 49.183(d), Water Code, is amended to
	read as follows:
	(d)  A district's bonds are negotiable instruments within
	the meaning and purposes of the Business & Commerce Code. A
	district's bonds may be issued and bear interest in accordance with
	Chapters 1201, 1204, and 1371, Government Code, and Subchapters
	A-C, Chapter 1207, Government Code. Except for this subsection,
	this section does not apply to special water authorities or
	districts described in Section 49.181(h)(1)(D) [49.181(h)(4)].
	SECTION 4.  The change in law made by this Act does not apply
	to bonds for which an application and report were submitted to the
	Texas Commission on Environmental Quality under Section 49.181(b),
	Water Code, before the effective date of this Act. Those bonds are
	governed by the law as it existed immediately before the effective
	date of this Act, and that law is continued in effect for that
	purpose.
	SECTION 5.  This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution.  If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2011.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 1901 was passed by the House on April
	14, 2011, by the following vote:  Yeas 142, Nays 0, 1 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 1901 was passed by the Senate on May
	12, 2011, by the following vote:  Yeas 31, Nays 0
	.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor