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