WATER CODE
CHAPTER 54. MUNICIPAL UTILITY DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
§ 54.001. DEFINITIONS. In this chapter:
(1) "District" means a municipal utility district
operating under this chapter.
(2) "Board" means the board of directors of a
district.
(3) "Director" means a member of the board of
directors of a district.
(4) "Commission" means the Texas Natural Resource
Conservation Commission.
(5) "Executive director" means the executive director
of the Texas Natural Resource Conservation Commission.
(6) "Public agency" means any city, the United States,
the State of Texas, and any district or authority created under
Article XVI, Section 59, or Article III, Section 52, of the Texas
Constitution, including any river authority, or any other political
subdivision or governmental agency of the United States or the
State of Texas.
(7) "City" means any incorporated city, town, or
village of the State of Texas whether operating under general law or
under its home-rule charter.
(8) "Extraterritorial jurisdiction" means the
extraterritorial jurisdiction of a city as defined in Article I,
Chapter 160, Acts of the 58th Legislature, 1963, as amended
(Article 970a, Vernon's Texas Civil Statutes).
(9) "Sole expense" means the actual cost of the
relocation, raising, rerouting, or changing grade or alteration of
construction and providing comparable replacement without
enhancing the facilities after deducting from it the net salvage
value derived from the old facility.
Added by Acts 1971, 62nd Leg., p. 774, ch. 84, § 1. Amended by
Acts 1981, 67th Leg., p. 961, ch. 367, § 1, eff. June 10, 1981;
Acts 1985, 69th Leg., ch. 795, § 1.140, eff. Sept. 1, 1985; Acts
1991, 72nd Leg., 1st C.S., ch. 3, § 1.077, eff. Aug. 12, 1991.
SUBCHAPTER B. CREATION OF DISTRICT; CONVERSION OF DISTRICT
§ 54.011. CREATION OF DISTRICT. A municipal utility
district may be created under and subject to the authority,
conditions, and restrictions of Article XVI, Section 59, of the
Texas Constitution.
Added by Acts 1971, 62nd Leg., p. 774, ch. 84, § 1.
§ 54.012. PURPOSES OF A DISTRICT. A district shall be
created for the following purposes:
(1) the control, storage, preservation, and
distribution of its storm water and floodwater, the water of its
rivers and streams for irrigation, power, and all other useful
purposes;
(2) the reclamation and irrigation of its arid,
semiarid, and other land needing irrigation;
(3) the reclamation and drainage of its overflowed
land and other land needing drainage;
(4) the conservation and development of its forests,
water, and hydroelectric power;
(5) the navigation of its inland and coastal water;
(6) the control, abatement, and change of any shortage
or harmful excess of water;
(7) the protection, preservation, and restoration of
the purity and sanitary condition of water within the state; and
(8) the preservation of all natural resources of the
state.
Added by Acts 1971, 62nd Leg., p. 775, ch. 84, § 1.
§ 54.013. COMPOSITION OF DISTRICT. (a) A district may
include the area in all or part of any county or counties including
all or part of any cities and other public agencies.
(b) The land composing a district need not be in one body,
but may consist of separate bodies of land separated by land which
is not included in the district.
Added by Acts 1971, 62nd Leg., p. 775, ch. 84, § 1.
§ 54.014. PETITION. When it is proposed to create a
district, a petition requesting creation shall be filed with the
commission. The petition shall be signed by a majority in value of
the holders of title of the land within the proposed district, as
indicated by the tax rolls of the central appraisal district. If
there are more than 50 persons holding title to the land in the
proposed district, as indicated by the tax rolls of the central
appraisal district, the petition is sufficient if it is signed by 50
holders of title to the land.
Added by Acts 1971, 62nd Leg., p. 775, ch. 84, § 1. Amended by
Acts 2001, 77th Leg., ch. 1423, § 29, eff. June 17, 2001.
§ 54.015. CONTENTS OF PETITION. The petition shall:
(1) describe the boundaries of the proposed district
by metes and bounds or by lot and block number, if there is a
recorded map or plat and survey of the area;
(2) state the general nature of the work proposed to be
done, the necessity for the work, and the cost of the project as
then estimated by those filing the petition; and
(3) include a name of the district which shall be
generally descriptive of the locale of the district followed by the
words Municipal Utility District, or if a district is located
within one county, it may be designated "__________ County
Municipal Utility District No. ______." (Insert the name of the
county and proper consecutive number.) The proposed district shall
not have the same name as any other district in the same county.
Added by Acts 1971, 62nd Leg., p. 775, ch. 84, § 1.
§ 54.016. CONSENT OF CITY. (a) No land within the
corporate limits of a city or within the extraterritorial
jurisdiction of a city, shall be included in a district unless the
city grants its written consent, by resolution or ordinance, to the
inclusion of the land within the district in accordance with
Section 42.042, Local Government Code, and this section. The
request to a city for its written consent to the creation of a
district, shall be signed by a majority in value of the holders of
title of the land within the proposed district as indicated by the
county tax rolls or, if there are more than 50 persons holding title
to the land in the proposed district as indicated by the county tax
rolls, the request to the city will be sufficient if it is signed by
50 holders of title to the land in the district. A petition for the
written consent of a city to the inclusion of land within a district
shall describe the boundaries of the land to be included in the
district by metes and bounds or by lot and block number, if there is
a recorded map or plat and survey of the area, and state the general
nature of the work proposed to be done, the necessity for the work,
and the cost of the project as then estimated by those filing the
petition. If, at the time a petition is filed with a city for
creation of a district, the district proposes to connect to a city's
water or sewer system or proposes to contract with a regional water
and wastewater provider which has been designated as such by the
commission as of the date such petition is filed, to which the city
has made a capital contribution for the water and wastewater
facilities serving the area, the proposed district shall be
designated as a "city service district." If such proposed district
does not meet the criteria for a city service district at the time
the petition seeking creation is filed, such district shall be
designated as a "noncity service district." The city's consent
shall not place any restrictions or conditions on the creation of a
noncity service district as defined by Chapter 54 of the Texas Water
Code other than those expressly provided in Subsection (e) of this
section and shall specifically not limit the amounts of the
district's bonds. A city may not require annexation as a consent to
creation of any district. A city shall not refuse to approve a
district bond issue for any reason except that the district is not
in compliance with valid consent requirements applicable to the
district. If a city grants its written consent without the
concurrence of the applicant to the creation of a noncity service
district containing conditions or restrictions that the
petitioning land owner or owners reasonably believe exceed the
city's powers, such land owner or owners may petition the
commission to create the district and to modify the conditions and
restrictions of the city's consent. The commission may declare any
provision of the consent to be null and void.
(b) If the governing body of a city fails or refuses to grant
permission for the inclusion of land within its extraterritorial
jurisdiction in a district within 90 days after receipt of a written
request, a majority of the electors in the area proposed to be
included in the district or the owner or owners of 50 percent or
more of the land to be included may petition the governing body of
the city and request the city to make available to the land the
water or sanitary sewer service contemplated to be provided by the
district.
(c) If the governing body of the city and a majority of the
electors or the owner or owners of 50 percent or more of the land to
be included in the district fail to execute a mutually agreeable
contract providing for the water or sanitary sewer service
requested within 120 days after receipt of the petition, the
failure shall constitute authorization for the inclusion of the
land in the district under the provisions of this section.
Authorization for the inclusion of such land within the district
under the provisions of this section shall mean only authorization
to initiate proceedings to include the land within the district as
otherwise provided by this Act.
(d) The provisions of this section relating to the method of
including land in a district without securing the written consent
of a city applies only to land within the extraterritorial
jurisdiction of a city and does not apply to land within the
corporate limits of a city. If the city fails or refuses to grant
permission for the inclusion of land in a district or to execute a
mutually agreeable contract providing for the water or sanitary
sewer service requested within the time limits contained within
Subsection (b) or (c) of this section, the applicant may petition
the commission for creation of the district or inclusion of the land
in a district. The commission shall allow creation or inclusion of
the land in a proposed district upon a finding that the city 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
shall provide that construction of the facilities necessary to
serve the land shall be commenced within two years, and shall be
substantially complete within four and one-half years from the date
the petition was filed with the city. Upon any appeal taken to the
district court from the commission ruling, all parties to the
commission hearing shall be made parties to the appeal. The court
shall hear the case within 120 days from the date the appeal is
filed. If the case is continued or appealed to a higher court
beyond such 120-day period, the court shall require the appealing
party in the case of appeal to a higher court or party requesting
such 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
such 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. Upon final disposition, a court may award damages,
including any damages for delays, attorney's fees, and costs of
court to the prevailing party. Under no circumstances shall land
within the corporate limits of a city be included in a district
without the written consent, by ordinance or resolution, of the
city. The provisions of this section shall apply whether the land
is proposed to be included in the district at the time of creation
of a district or to be included by annexation to a district. A
district shall not allow the owner of a tract to connect to the
district's water or wastewater system unless such tract is a
legally subdivided lot which is part of a recorded subdivision plat
or is otherwise legally exempt from the subdivision requirements of
the applicable governmental authority.
(e) A city may provide in its written consent to the
inclusion of land in a district, that the district construct all
facilities to serve the land in accordance with plans and
specifications which have been approved by the city. The city may
also provide in its written consent that the city shall have the
right to inspect all facilities being constructed by a district.
The city's consent to the inclusion of land in the district may also
contain restrictions on the terms and provisions of the district's
bonds and notes issued to provide service to the land and conditions
on the sale of the district's bonds and notes if the restrictions
and conditions do not generally render the bonds and notes of
districts in the city's extraterritorial jurisdiction
unmarketable. The city's consent to the inclusion of land in a
district may restrict the purposes for which a district may issue
bonds to the purposes of the purchase, construction, acquisition,
repair, extension and improvement of land, easements, works,
improvements, facilities, plants, equipment and appliances
necessary to:
(1) provide a water supply for municipal uses,
domestic uses and commercial purposes;
(2) collect, transport, process, dispose of and
control all domestic, industrial or communal wastes whether in
fluid, solid or composite state; and
(3) gather, conduct, divert and control local storm
water or other local harmful excesses of water in the district and
the payment of organization expenses, operation expenses during
construction and interest during construction.
(f) A city may provide in its written consent for the
inclusion of land in a district that a contract ("allocation
agreement") between the district and the city be entered into prior
to the first issue of bonds, notes, warrants, or other obligations
of the district. The allocation agreement shall contain the
following provisions:
(1) a method by which the district shall continue to
exist following the annexation of all territory within the district
by the city, if the district is initially located outside the
corporate limits of the city;
(2) an allocation of the taxes or revenues of the
district or the city which will assure that, following the date of
the inclusion of all the district's territory within the corporate
limits of the city, the total annual ad valorem taxes collected by
the city and the district from taxable property within the district
does not exceed an amount greater than the city's ad valorem tax
upon such property;
(3) an allocation of governmental services to be
provided by the city or the district following the date of the
inclusion of all of the district's territory within the corporate
limits of the city;
(4) such other terms and conditions as may be deemed
appropriate by the city.
(g) In addition to all the rights and remedies provided by
the laws of the state in the event a district violates the terms and
provisions of a city's written consent, the city shall be entitled
to injunctive relief or a writ of mandamus issued by a court of
competent jurisdiction restraining, compelling or requiring the
district and its officials to observe and comply with the terms and
provisions prescribed in the city's written consent to the
inclusion of land within the district.
(h) A city with a population of 1.18 million or less may
provide in its written consent for the inclusion of land in a
district that after annexation the city may set rates for water
and/or sewer services for property that was within the territorial
boundary of such district at the time of annexation, which rates may
vary from those for other properties within the city for the purpose
of wholly or partially compensating the city for the assumption of
obligation under this code providing that:
(1) such written consent contains a contract entered
into by the city and the persons petitioning for creation of the
district setting forth the time and/or the conditions of annexation
by the city which annexation shall not occur prior to the
installation of 90 percent of the facilities for which district
bonds were authorized in the written consent; and that
(2) the contract sets forth the basis on which rates
are to be charged for water and/or sewer services following
annexation and the length of time they may vary from those rates
charged elsewhere in the city; and that
(3) the contract may set forth the time, conditions,
or lands to be annexed by the district; and that
(4)(A) Each purchaser of land within a district which
has entered into a contract with a city concerning water and/or
sewer rates as set forth herein shall be furnished by the seller at
or prior to the final closing of the sale and purchase with a
separate written notice, executed and acknowledged by the seller,
which shall contain the following information:
(i) the basis on which the monthly water
and/or sewer rate is to be charged under the contract stated as a
percentage of the water and/or sewer rates of the city;
(ii) the length of time such rates will be
in effect;
(iii) the time and/or conditions of
annexation by the city implementing such rates.
The provisions of Sections 49.452(g)-(p) and (s), Water Code,
are herein incorporated by reference thereto, and are applicable to
the separate written notice required by Section 54.016(h)(4).
A suit for damages under the provisions of these referenced
sections must be brought within 90 days after the purchaser
receives his or her first water and/or sewer service charge
following annexation, or the purchaser loses his or her right to
seek damages under this referenced section.
(B) The governing board of any district covered
by the provisions of this subsection shall file with the county
clerk in each of the counties in which all or part of the district is
located a duly affirmed and acknowledged statement which includes
the information required in Section 54.016(h)(4)(A) and a complete
and accurate map or plat showing the boundaries of the district.
The provisions of Sections 49.455(c)-(j), Water Code, are
herein incorporated by reference thereto.
(i) the basis on which the monthly water and/or
sewer rate is to be charged under the contract stated as a
percentage of the water and/or sewer rates of the city;
(ii) the length of time such rates will be in
effect;
(iii) the time and/or conditions of annexation by
the city implementing such rates.
The provisions of Sections 50.301(d) through Section
50.301(n), as amended, and Section 50.301(p), Water Code, are
herein incorporated by reference thereto, and are applicable to the
separate written notice required by Section 54.016(h)(4).
A suit for damages under the provisions of these
referenced sections must be brought within 90 days after the
purchaser receives his or her first water and/or sewer service
charge following annexation, or the purchaser loses his or her
right to seek damages under this referenced section.
(B) The governing board of any district covered by the
provisions of this subsection shall file with the county clerk in
each of the counties in which all or part of the district is located
a duly affirmed and acknowledged statement which includes the
information required in Section 54.016(h)(4)(A) and a complete and
accurate map or plat showing the boundaries of the district.
The provisions of Sections 50.302(c) through Section
50.302(j), Water Code, as amended, are herein incorporated by
reference thereto.
Added by Acts 1971, 62nd Leg., p. 775, ch. 84, § 1. Amended by
Acts 1975, 64th Leg., p. 247, ch. 98, § 1, eff. Sept. 1, 1975;
Acts 1979, 66th Leg., p. 2026, ch. 796, § 1, 4, eff. Aug. 27,
1979; Acts 1987, 70th Leg., ch. 1077, § 9, eff. Sept. 1, 1987;
Acts 1989, 71st Leg., ch. 1, § 3(m), eff. Aug. 28, 1989; Acts
1995, 74th Leg., ch. 76, § 11.326, eff. Sept. 1, 1995; Acts
2001, 77th Leg., ch. 669, § 147, eff. Sept. 1, 2001.
§ 54.0161. REVIEW OF CREATION BY COUNTY. (a) If all or
part of a proposed district is to be located outside the
extraterritorial jurisdiction of a city, the commissioners court of
the county in which the district is to be located may review the
petition for creation and other evidence and information relating
to the proposed district that the commissioners consider necessary.
Petitioners for the creation of a district shall submit to the
county commissioners court any relevant information requested by
the commissioners court in the event a review is done.
(b) In the event of a review, the commissioners court shall
submit to the commission, at least 10 days before the date set for
the hearing on the petition, a written opinion stating whether or
not the county would recommend the creation of the proposed
district and stating any findings, conclusions, and other
information that the commissioners think would assist the
commission in making a final determination on the petition.
(c) In passing on a petition under this subchapter, the
commission shall consider the written opinion submitted by the
county commissioners.
Added by Acts 1975, 64th Leg., p. 1293, ch. 485, § 1, eff. Sept.
1, 1975.
§ 54.0162. OPTION OF SELECTION BY DISTRICT COMPOSED OF
NONCONTIGUOUS AREAS LOCATED IN THE EXTRATERRITORIAL JURISDICTION
OF TWO MUNICIPALITIES. (a) A municipal utility district composed
of noncontiguous areas that on January 1, 1995, are contained in the
extraterritorial jurisdiction of two municipalities may choose, by
a resolution of the governing body of the district, to be wholly
contained in the extraterritorial jurisdiction of one municipality
selected by the governing body of the district if:
(1) both the municipality selected by the district and
all parts of the district are located in the same county;
(2) a majority of the area of the municipality not
selected by the district is in a county other than the county in
which the district is located, and neither county has a population
greater than 2,500,000, according to the last preceding federal
census;
(3) the boundary of the municipality selected by the
district is located not more than two miles from any part of the
district;
(4) the noncontiguous areas of the district are not,
at their closest point, more than two miles apart;
(5) the district is within a water control and
improvement district; and
(6) a certified copy of the resolution of the
governing body of the district is filed with both municipalities
before the effective date specified in the resolution.
(b) If a municipal utility district selects a municipality
under Subsection (a), another municipal utility district that has a
boundary contiguous to the district that has selected a
municipality under Subsection (a) and has a boundary contiguous to
the selected municipality may choose by resolution of the governing
body of the municipal utility district to be contained wholly in the
extraterritorial jurisdiction of the selected municipality. A copy
of the resolution must be filed in the same manner as required by
Subsection (a)(6).
(c) The governing body of a municipality not selected under
the provisions of Subsection (a) or (b) shall release the area of
the municipal utility district from the municipality's
extraterritorial jurisdiction on the effective date of the
resolution presented to the governing body of the municipality
under Subsection (a) or (b). The released area becomes part of the
extraterritorial jurisdiction of the selected municipality. The
released area is not subject to any ordinance of the municipality
not selected by the district.
(d) This section controls over any other law relating to the
creation, application, or operation of the extraterritorial
jurisdiction of a municipality.
(e) The provisions of this section also apply to a municipal
utility district that:
(1) was created before 1980;
(2) has an area of 700 acres or less; and
(3) is located, in part, within the extraterritorial
jurisdiction of two or more municipalities and, in part, outside
municipal extraterritorial jurisdiction in the unincorporated area
of a county.
(f) A municipal utility district acting under Subsection
(e) shall comply with the notification and selection requirements
of this section. A municipality affected by the decision of a
municipal utility district acting under Subsection (e) shall comply
with the requirements of Subsections (b) and (c).
(g) A municipal utility district described by Subsection
(e) shall notify the affected municipality within 30 calendar days
of notice of intent to annex by that municipality.
Added by Acts 1995, 74th Leg., ch. 784, § 1, eff. June 16, 1995.
§ 54.0163. OPTION OF SELECTION OF EXTRATERRITORIAL
JURISDICTION FOR CERTAIN DISTRICTS. (a) The board of a district
that is located in the extraterritorial jurisdictions of more than
one municipality by resolution may select the municipality that may
exercise authority within the district as a whole. The resolution
must state the effective date.
(b) As soon as practicable, the board shall file with each
affected municipality and in the real property records of each
county in which the district is located a certified copy of the
resolution.
(c) On the effective date of the resolution, the district is
contained wholly in the extraterritorial jurisdiction of the
municipality selected by the resolution for all purposes. No
action or approval by a municipality not selected is required.
(d) A board that has made a selection of extraterritorial
jurisdiction under Section 54.0162 may confirm the selection by the
adoption of a resolution under this section. If the selection under
Section 54.0162 is confirmed under this subsection, the selection
is effective from the date of the original selection.
(e) Repealed by Acts 2003, 78th Leg., ch. 248, § 57.
Added by Acts 1997, 75th Leg., ch. 1188, § 1, eff. June 20, 1997.
Amended by Acts 2003, 78th Leg., ch. 248, § 57(1), eff. June 18,
2003.
§ 54.018. NOTICE AND HEARING ON DISTRICT CREATION. If a
petition is filed under Section 54.014, the commission shall give
notice of an application as required by Section 49.011 and may
conduct a hearing on the application if the commission determines
that a hearing is necessary under Section 49.011.
Added by Acts 1971, 62nd Leg., p. 777, ch. 84, § 1. Amended by
Acts 1997, 75th Leg., ch. 1070, § 27, eff. Sept. 1, 1997.
§ 54.020. HEARING. (a) If the commission determines
that a hearing is necessary under Section 49.011, the commission
shall conduct a hearing and accept evidence on the sufficiency of
the petition and whether the project is feasible and practicable
and is necessary and would be a benefit to all or any part of the
land proposed to be included in the district.
(b) The commission shall have jurisdiction to determine all
issues on the sufficiency of the petition and creation of the
district.
(c) The hearing may be adjourned from day to day, and the
commission shall have power to make all incidental orders necessary
with respect to the matters before it.
Added by Acts 1971, 62nd Leg., p. 778, ch. 84, § 1. Amended by
Acts 1997, 75th Leg., ch. 1070, § 28, eff. Sept. 1, 1997.
§ 54.021. GRANTING OR REFUSING PETITION. (a) If the
commission finds that the petition conforms to the requirements of
Section 54.015 and that the project is feasible and practicable and
is necessary and would be a benefit to the land to be included in the
district, the commission shall so find by its order and grant the
petition.
(b) In determining if the project is feasible and
practicable and if it is necessary and would be a benefit to the
land included in the district, the commission shall consider:
(1) the availability of comparable service from other
systems, including but not limited to water districts,
municipalities, and regional authorities;
(2) the reasonableness of projected construction
costs, tax rates, and water and sewer rates; and
(3) whether or not the district and its system and
subsequent development within the district will have an
unreasonable effect on the following:
(A) land elevation;
(B) subsidence;
(C) groundwater level within the region;
(D) recharge capability of a groundwater source;
(E) natural run-off rates and drainage;
(F) water quality; and
(G) total tax assessments on all land located
within a district.
(c) If the commission finds that not all of the land
proposed to be included in the district will be benefited by the
creation of the district, the commission shall so find and exclude
all land which is not benefited from the proposed district and shall
redefine the proposed district's boundaries accordingly.
(d) If the commission finds that the petition does not
conform to the requirements of Section 54.015 of this code or that
the project is not feasible, practicable, necessary, or a benefit
to the land in the district, the commission shall so find by its
order and deny the petition.
(e) A copy of the order of the commission granting or
denying a petition shall be mailed to each city having
extraterritorial jurisdiction in the county or counties in which
the district is located who requested a hearing under Section
49.011.
Added by Acts 1971, 62nd Leg., p. 778, ch. 84, § 1. Amended by
Acts 1975, 64th Leg., p. 1292, ch. 484, § 1, eff. Sept. 1, 1975;
Acts 1997, 75th Leg., ch. 1070, § 29, eff. Sept. 1, 1997.
§ 54.022. TEMPORARY DIRECTORS. If the commission
grants the petition, it shall appoint five temporary directors to
serve until permanent directors are elected.
Added by Acts 1971, 62nd Leg., p. 778, ch. 84, § 1.
§ 54.023. APPEAL FROM THE ORDER OF THE COMMISSION. Any
person who signed the petition, any city, or any person who appeared
in person or by attorney or agent and offered testimony for or
against the creation of the district, may appeal from the order of
the commission granting or refusing the petition within 30 days
after the entry of the order.
Added by Acts 1971, 62nd Leg., p. 778, ch. 84, § 1.
§ 54.024. SUPERVISION BY COMMISSION. The rights,
powers, privileges, authority, and functions conferred on a
district by granting of a petition for creation shall be subject to
the continuing right of supervision of the state to be exercised by
and through the commission.
Added by Acts 1971, 62nd Leg., p. 778, ch. 84, § 1. Amended by
Acts 1981, 67th Leg., p. 961, ch. 367, § 1, eff. June 10, 1981;
Acts 1985, 69th Leg., ch. 795, § 1.142, eff. Sept. 1, 1985; Acts
1995, 74th Leg., ch. 76, § 11.328, eff. Sept. 1, 1995.
§ 54.025. QUALIFICATION OF TEMPORARY DIRECTORS. After
a district has been organized, each temporary director shall
execute a bond in accordance with the provisions of Section 49.055
and shall take the oath of office, and the board shall meet and
organize.
Added by Acts 1971, 62nd Leg., p. 778, ch. 84, § 1. Amended by
Acts 1995, 74th Leg., ch. 715, § 16, eff. Sept. 1, 1995.
§ 54.030. CONVERSION OF CERTAIN DISTRICTS INTO DISTRICTS
OPERATING UNDER THIS CHAPTER. (a) Any water improvement
district, water control and improvement district, fresh water
supply district, levee improvement district, irrigation district,
or any other conservation and reclamation district created under
Article XVI, Section 59, of the Texas Constitution, may be
converted to a district operating under this chapter.
(b) The governing body of a district which desires to
convert into a district operating under this chapter shall 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, 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 the commission to hold a hearing on the question of the
conversion of the district.
(c) A copy of the resolution shall be filed with the
commission.
Added by Acts 1971, 62nd Leg., p. 779, ch. 84, § 1. Amended by
Acts 1983, 68th Leg., p. 368, ch. 81, § 9(e), eff. Sept. 1, 1983;
Acts 1987, 70th Leg., ch. 399, § 3, eff. Sept. 1, 1987.
§ 54.031. ESTABLISHING DATE FOR HEARING. When the
resolution requesting conversion is filed, the commission, or
someone authorized by the commission, shall fix a date, time, and
place when the conversion hearing will be held.
Added by Acts 1971, 62nd Leg., p. 780, ch. 84, § 1.
§ 54.032. CONVERSION OF DISTRICT: NOTICE. (a) 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.
(b) The notice shall be published once a week for two
consecutive weeks with the first publication to be made not less
than 14 full days before the time set for the hearing.
(c) The notice shall:
(1) state the time and place of the hearing;
(2) set out the resolution adopted by the district in
full; and
(3) notify all interested persons to appear and offer
testimony for or against the proposal contained in the resolution.
Added by Acts 1971, 62nd Leg., p. 780, ch. 84, § 1.
§ 54.033. CONVERSION OF DISTRICT;
FINDINGS. (a) After 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, it shall enter an
order making this finding and the district shall become a district
operating under this chapter and no confirmation election shall be
required.
(b) If the commission finds that the conversion of the
district would not serve the best interest of the district and would
not be a benefit to the land and property included in the district,
it shall enter an order against conversion of the district into one
operating under this chapter.
(c) The findings of the commission entered under this
section shall be subject to appeal or review within 30 days after
entry of the order of the commission granting or denying the
conversion.
(d) A copy of the commission order converting a district
shall be filed in the deed records of the county or counties in
which the district is located.
Added by Acts 1971, 62nd Leg., p. 780, ch. 84, § 1. Amended by
Acts 1981, 67th Leg., p. 981, ch. 367, § 23, eff. June 10, 1981.
§ 54.034. EFFECT OF CONVERSION. A district which is
converted into a district operating under this chapter shall:
(1) be constituted a municipal utility district
operating under and governed by this chapter;
(2) be a conservation and reclamation district under
the provisions of Article XVI, Section 59, of the Texas
Constitution; and
(3) have and may exercise all the powers, authority,
functions, duties, and privileges provided in this chapter in the
same manner and to the same extent as if the district had been
created under this chapter.
Added by Acts 1971, 62nd Leg., p. 780, ch. 84, § 1.
§ 54.035. RESERVATION OF CERTAIN POWERS FOR CONVERTED
DISTRICTS. (a) Any district after converting into a municipal
utility district may continue to exercise all necessary specific
powers under any specific conditions provided by the chapter of
this code under which the district was operating before conversion
and may retain its original name.
(b) Any district converted into a municipal utility
district shall continue to have the power to issue bonds voted
before the conversion but yet unissued and levy and collect
maintenance taxes, bond taxes, or other taxes which were voted
before the conversion.
(c) At the time of making the order of conversion, the
commission shall specify in the order the specific provisions of
this code under which the district had been operating which are to
be preserved and made applicable to the operations of the district
after conversion into a district operating under this chapter and
whether a new name will be assigned to the district or the old name
retained.
(d) A reservation of a former power under Subsection (a) of
this section may be made only if this chapter does not make specific
provision concerning a matter necessary to the effectual operation
of the converted district.
(e) In all cases in which this chapter does make specific
provision, this chapter shall, after conversion, control the
operations and procedure of the converted district.
Added by Acts 1971, 62nd Leg., p. 781, ch. 84, § 1.
§ 54.036. DIRECTORS TO CONTINUE SERVING. The existing
board of a district converted to a municipal utility district under
the provisions of this chapter shall continue to serve as the board
of the converted district.
Added by Acts 1971, 62nd Leg., p. 781, ch. 84, § 1. Amended by
Acts 1981, 67th Leg., p. 961, ch. 367, § 1, eff. June 10, 1981;
Acts 1983, 68th Leg., p. 1105, ch. 250, § 1, eff. Aug. 29, 1983;
Acts 1983, 68th Leg., p. 5214, ch. 951, § 6, eff. Jan. 1, 1984;
Acts 1995, 74th Leg., ch. 715, § 17, eff. Sept. 1, 1995.
§ 54.037. REGIONAL PLAN IMPLEMENTATION
AGENCIES. (a) This section applies only to regional plan
implementation agencies, referred to in this section as agency,
created as provided below. An agency may only be created in
connection with regional planning efforts, and only then when
requested by a city. The purpose of this section is to encourage
and promote regional planning by cities and to facilitate the
implementation of areawide, systematic solutions to water, waste
disposal, drainage, and other problems.
(b) The creation of an agency requires that a special
petition be filed with the commission. The special petition shall:
(1) describe the boundaries of the proposed agency by
metes and bounds or by lot and block number, if there is a recorded
map or plat and survey of the area;
(2) describe the regional planning efforts which are
in progress or completed as of the date of the petition and the
anticipated role of the proposed agency in connection with the
implementation of the regional plan;
(3) include a name of the proposed agency, which must
be generally descriptive of the locale followed by the words
"regional plan implementation agency" and must be different from
the name of any other agency in the same county;
(4) be signed by or on behalf of the owner or owners of
the fee simple title to 50 percent or more of the surface of the land
within the boundaries of the proposed agency, as of the date of the
petition, as indicated by the county tax rolls or other title data
acceptable to the commission;
(5) be approved by the governing body of each city
having extraterritorial jurisdiction over land within the
boundaries of the proposed agency as of the date of the petition, by
motion, resolution, or ordinance which certifies that:
(A) the regional planning efforts described in
the petition are approved by the city;
(B) in the opinion of the governing body, the
creation of the proposed agency would assist in the implementation
of such regional plan; and
(C) the city requests and consents to the
creation of the proposed agency; and
(6) be endorsed by an officer of each such city to
indicate that the petition has been so approved by the governing
body.
(c) The application fee for such a special petition is the
same as for any ordinary district. After the petition is filed, the
standards and procedures for commission review and action are the
same as for any ordinary district, except that:
(1) the commission must consider the scope of the
regional plan in connection with its findings; and
(2) the requirements for the special petition, above,
shall apply in lieu of the requirements for ordinary districts set
out in Section 54.014, 54.015, 54.016, or other sections of this
code.
(d) The application of an agency for approval of a bond
issue must include an agreement between the agency and each city
having extraterritorial jurisdiction over land within the agency as
of the date of the application. The agreement must identify those
facilities which are proposed to be financed from the proceeds of
the bond issue in question. It must also identify which of those
facilities are part of the regional plan and which are not part of
the plan. Those which are part of the regional plan:
(1) may be larger than would otherwise be necessary to
serve just the needs of the agency; and
(2) may be constructed by, conveyed to, or otherwise
acquired by the city, subject to the terms of such agreement. Those
facilities which are not part of the regional plan and are to be
financed by the agency must be agreed upon by the city and the
agency as being consistent with the regional plan.
(e) An agency may acquire any land, easements, or other
property, real or personal, within or without the agency, for any
purpose or function permitted to a district and may elect to condemn
either the fee simple title or an easement only. Section 54.212(a)
of this code does not apply to an agency. If the mode and manner for
condemnation of any type of property is not otherwise prescribed by
law, the Texas Water Development Board may prescribe the same by
rule.
(f) An agency is a district subject to all provisions of
this chapter and other laws relating to districts, except that the
special provisions of this section shall take precedence over
differing or conflicting provisions elsewhere.
(g) Nothing in this Act waives the requirements of this
chapter or other applicable laws relating to voter approval of bond
issues.
Added by Acts 1985, 69th Leg., ch. 939, § 1, eff. Aug. 26, 1985.
Amended by Acts 1987, 70th Leg., ch. 399, § 4, eff. Sept. 1,
1987.
SUBCHAPTER C. ADMINISTRATIVE PROVISIONS
§ 54.101. BOARD OF DIRECTORS. A district shall be
governed by a board of five directors.
Added by Acts 1971, 62nd Leg., p. 781, ch. 84, § 1.
§ 54.102. QUALIFICATIONS FOR DIRECTORS. To be
qualified to serve as a director, a person shall be at least 18
years old, a resident citizen of the State of Texas, and either own
land subject to taxation in the district or be a qualified voter
within the district.
Added by Acts 1971, 62nd Leg., p. 781, ch. 84, § 1. Amended by
Acts 1997, 75th Leg., ch. 1070, § 30, eff. Sept. 1, 1997.
SUBCHAPTER D. POWERS AND DUTIES
§ 54.201. POWERS. (a) A district shall have the
functions, powers, authority, rights, and duties which will permit
accomplishment of the purposes for which it was created.
(b) A district is authorized to purchase, construct,
acquire, own, operate, maintain, repair, improve, or extend inside
and outside its boundaries any and all works, improvements,
facilities, plants, equipment, and appliances necessary to
accomplish the purposes of the district authorized by the
constitution, this code, or other law, including all works,
improvements, facilities, plants, equipment, and appliances
incident, helpful, or necessary to:
(1) supply water for municipal uses, domestic uses,
power, and commercial purposes and all other beneficial uses or
controls;
(2) collect, transport, process, dispose of, and
control all domestic, industrial, or communal wastes whether in
fluid, solid, or composite state;
(3) gather, conduct, divert, and control local storm
water or other local harmful excesses of water in a district;
(4) irrigate the land in a district;
(5) alter land elevation in a district where it is
needed;
(6) navigate coastal and inland waters of the
district; and
(7) provide parks and recreational facilities for the
inhabitants in the district, subject to the provisions of Chapter
49.
Added by Acts 1971, 62nd Leg., p. 786, ch. 84, § 1. Amended by
Acts 1985, 69th Leg., ch. 100, § 2, eff. Sept. 1, 1985; Acts
2003, 78th Leg., ch. 248, § 27, eff. June 18, 2003.
§ 54.203. MUNICIPAL SOLID WASTE. A district is
authorized to purchase, construct, acquire, own, operate,
maintain, repair, improve, extend, or establish a municipal solid
waste collection and disposal system, including recycling, inside
and outside the district and make proper charges for it. A district
may require use of such services as a condition for receiving other
district services. A district may enter into an exclusive contract
with a private entity to provide such services to all land and
persons within its boundaries.
Added by Acts 1971, 62nd Leg., p. 787, ch. 84, § 1. Amended by
Acts 1991, 72nd Leg., ch. 820, § 1, eff. Aug. 26, 1991; Acts
1995, 74th Leg., ch. 715, § 18, eff. Sept. 1, 1995.
§ 54.205. ADOPTING RULES AND REGULATIONS. A district
may adopt and enforce reasonable rules and regulations to:
(1) secure and maintain safe, sanitary, and adequate
plumbing installations, connections, and appurtenances as
subsidiary parts of its sanitary sewer system;
(2) preserve the sanitary condition of all water
controlled by the district;
(3) prevent waste or the unauthorized use of water
controlled by the district;
(4) regulate privileges on any land or any easement
owned or controlled by the district; and
(5) provide and regulate a safe and adequate
freshwater distribution system.
Added by Acts 1971, 62nd Leg., p. 787, ch. 84, § 1. Amended by
Acts 1981, 67th Leg., p. 3150, ch. 828, § 1, eff. June 17, 1981.
§ 54.2051. SERVICE CONNECTIONS TO CERTAIN DWELLING
UNITS. (a) If the tenant of an individually metered dwelling unit
applies to a district for utility service for that unit, the
district may not require that the service be connected in the name
of the landlord or owner of the unit.
(b) This section does not apply to a dwelling unit that is
located in a building that:
(1) contains two or more dwelling units; and
(2) is served by a master meter or demand meter.
(c) In this section, "individually metered dwelling unit"
means one or more rooms:
(1) rented for use as a permanent residence under a
single verbal or written rental agreement; and
(2) served by a utility meter that belongs to the
district and measures service only for that unit.
Added by Acts 1997, 75th Leg., ch. 166, § 8, eff. Sept. 1, 1997.
§ 54.2052. PLUMBING CODE. Notwithstanding any other
law, a district is not required to adopt a plumbing code. A
district may adopt and enforce one or more plumbing codes meeting
the standards and requirements of the rules and laws of this state
and may amend any code adopted to conform to local concerns if the
amendment does not substantially vary from rules or laws of this
state. If a municipal regulation conflicts with a district
regulation, the municipal regulation prevails.
Added by Acts 2003, 78th Leg., ch. 248, § 28, eff. June 18, 2003.
§ 54.206. EFFECT OF RULES. After the required
publication, rules adopted by the district under Section 54.205 of
this code shall be recognized by the courts as if they were penal
ordinances of a city.
Added by Acts 1971, 62nd Leg., p. 787, ch. 84, § 1.
§ 54.207. PUBLICATION OF RULES. (a) The board shall
publish once a week for two consecutive weeks a substantive
statement of the rules and the penalty for their violation in one or
more newspapers with general circulation in the area in which the
district is located.
(b) The substantive statement shall be condensed as far as
possible to intelligently explain the purpose to be accomplished or
the act forbidden by the rules.
(c) The notice must advise that breach of the rules will
subject the violator to a penalty and that the full text of the
rules are on file in the principal office of the district where they
may be read by any interested person.
(d) Any number of rules may be included in one notice.
Added by Acts 1971, 62nd Leg., p. 787, ch. 84, § 1.
§ 54.208. EFFECTIVE DATE OF RULES. The penalty for
violation of a rule is not effective and enforceable until five days
after the publication of the notice. Five days after the
publication, the published rule shall be in effect and ignorance of
it is not a defense to a prosecution for the enforcement of the
penalty.
Added by Acts 1971, 62nd Leg., p. 788, ch. 84, § 1.
§ 54.234. ACQUIRING ROAD UTILITY DISTRICT POWERS. Any
district, which has the power to levy taxes, may petition the
commission to acquire the powers granted to road utility districts
operating pursuant to Chapter 441, Transportation Code, under the
authority of Article III, Section 52, Texas Constitution. As soon
as practicable after such petition has been filed with the
commission, the commission shall issue an order either approving or
denying such petition. In the event of any conflict between the
provisions of the Water Code and the general laws of this state
applicable to the district and the provisions of Chapter 441,
Transportation Code, the provisions of the Water Code and the
general laws of this state applicable to the district shall
prevail.
Added by Acts 1985, 69th Leg., ch. 951, § 7, eff. Sept. 1, 1985.
Amended by Acts 1995, 74th Leg., ch. 165, § 22(77), eff. Sept. 1,
1995; Acts 2003, 78th Leg., ch. 248, § 29, eff. June 18, 2003.
§ 54.235. AUTHORITY TO CONTRACT. Any district created
by general law or special act of the legislature in existence for at
least 10 years which lies within a county that borders on the Gulf
of Mexico and that has a population of 190,000 and which has the
powers of this chapter and which also has or is authorized to
acquire road utility district powers pursuant to Section 54.234, of
this code, may contract with the county within which it is located
with respect to the ownership, maintenance, and operation of any
facilities or improvements which such district is authorized or may
be authorized to acquire by purchase, gift, lease, or otherwise,
except by condemnation, any and all property or interests in
property, whether real, personal, or mixed, tangible or intangible,
located inside or outside such county, that are found to be
necessary for such improvements or facilities. Such county may
enter into contracts with such districts as permitted by this
section for any term of years not exceeding 40 for the management
and operation of any or all of such property and interests in
property on such terms as the commissioners court of such county
deems appropriate.
Added by Acts 1985, 69th Leg., ch. 951, § 8(a), eff. Sept. 1,
1985.
§ 54.236. STREET OR SECURITY LIGHTING. Subject to the
provisions of this section, a district may purchase, install,
operate, and maintain street lighting or security lighting within
public utility easements or public rights-of-way within the
boundaries of the district. A district may not issue bonds
supported by ad valorem taxes to pay for the purchase,
installation, and maintenance of street or security lighting.
Added by Acts 1991, 72nd Leg., ch. 820, § 2, eff. Aug. 26, 1991.
Amended by Acts 2001, 77th Leg., ch. 1423, § 30, eff. June 17,
2001.
§ 54.237. ENFORCEMENT OF REAL PROPERTY
RESTRICTIONS. (a) As used in this section, "restriction" means a
limitation on the use of real property that is established or
incorporated in properly recorded covenants, property
restrictions, plats, plans, deeds, or other instruments affecting
real property in a district and that has not been abandoned, waived,
or properly rescinded.
(b) A district may take all actions necessary to enforce a
restriction, including the initiation, defense, or intervention in
litigation or an administrative proceeding to enjoin or abate the
violation of a restriction when, in the reasonable judgment of the
board of directors of the district, enforcement of the restriction
is necessary to sustain taxable property values in the district.
(c) In addition to damages which a district is entitled to
recover, a district shall be entitled to recover its costs and
reasonable attorney's fees when a district is the prevailing party
in litigation or an administrative proceeding to enforce a
restriction.
Added by Acts 1991, 72nd Leg., ch. 820, § 3, eff. Aug. 26, 1991.
§ 54.238. DEFINITIONS. In this subchapter:
(1) "Developer" means a person who owns a tract of land
within a district and who has divided or proposes to divide the
tract into two or more parts to lay out a subdivision of the tract,
including an addition to a municipality, or to lay out suburban,
building, or other lots, and to lay out streets, alleys, squares,
parks, or other parts of the tract intended to be dedicated to
public use or for the use of purchasers or owners of lots fronting
on or adjacent to the streets, alleys, squares, parks, or other
parts.
(2) "Facilities" means improvements constructed by a
developer for a district.
Added by Acts 1993, 73rd Leg., ch. 1036, § 1, eff. Sept. 1, 1993.
§ 54.239. APPEAL TO THE COMMISSION OF DECISION OF BOARD
REGARDING FACILITIES. A person aggrieved by a decision of a board
involving the cost, purchase, or use of facilities may appeal the
decision to the commission by filing a petition with the commission
seeking appropriate relief within 30 days after the date of the
decision. The commission may require a petitioner to include with a
petition under this subchapter a deposit in an amount estimated to
be sufficient to pay the costs of notice under V.T.C.A., Water Code
§ 54.240 and to hold the hearing on the dispute.
Added by Acts 1993, 73rd Leg., ch. 1036, § 1, eff. Sept. 1, 1993.
§ 54.240. NOTICE. The commission shall give notice of
the petition to persons who the commission determines may be
affected by the petition, including:
(1) the board;
(2) the owners of land within the district; and
(3) the ratepayers of the district who are served by
the facilities that are the subject of the petition.
Added by Acts 1993, 73rd Leg., ch. 1036, § 1, eff. Sept. 1, 1993.
§ 54.241. ACTION ON THE PETITION. (a) After notice and
hearing, the commission shall render a written decision granting or
denying the petition, in whole or in part.
(b) In rendering its decision, the commission shall
consider:
(1) the suitability of and necessity for the
facilities;
(2) the reasonableness of the cost of the facilities;
(3) the economic viability of the district; and
(4) any other relevant evidence.
Added by Acts 1993, 73rd Leg., ch. 1036, § 1, eff. Sept. 1, 1993.
§ 54.242. STREET REPAIR OR MAINTENANCE. A district
created by general law or special act of the legislature in
existence for at least 10 years may repair or maintain a street
within the district as provided by Section 54.522.
Added by Acts 1997, 75th Leg., ch. 520, § 1, eff. Sept. 1, 1997.
§ 54.243. DISPOSITION OF IMPACT FEES. A district that
charges a fee that is an impact fee as described in Section
395.001(4), Local Government Code, shall use the fees collected and
any interest accrued on the fees collected only for:
(1) payment of principal and interest on bonds, notes,
or other obligations issued by or on behalf of the district to
finance the capital improvements or facility expansions identified
in the capital improvement plan required by Section 395.012(d),
Local Government Code; or
(2) cash payment of the costs of capital improvements
or facility expansions identified in the capital improvement plan
required by Section 395.012(d), Local Government Code.
Added by Acts 1999, 76th Leg., ch. 1269, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 1313, § 1, eff. Sept. 1,
2001.
SUBCHAPTER F. ISSUANCE OF BONDS
§ 54.501. ISSUANCE OF BONDS. The district may issue its
bonds for the purpose of purchasing, constructing, acquiring,
owning, operating, repairing, improving, or extending any district
works, improvements, facilities, plants, equipment, and appliances
needed to accomplish the purposes set forth in Section 54.012 of
this code for which a district shall be created, including works,
improvements, facilities, plants, equipment, and appliances needed
to provide a waterworks system, sanitary sewer system, storm sewer
system, and solid waste disposal system.
Added by Acts 1971, 62nd Leg., p. 795, ch. 84, § 1. Amended by
Acts 1985, 69th Leg., ch. 100, § 3, eff. Sept. 1, 1985.
§ 54.502. FORM OF BONDS. (a) A district may issue its
bonds in various series or issues.
(b) Bonds shall mature serially or otherwise not more than
40 years from their date and shall bear interest at any rate
permitted by the Constitution and laws of the state, all as shall be
determined by the board.
(c) A district's bonds and interest coupons, if any, shall
be investment securities under the terms of Chapter 8 of the
Business & Commerce Code and may be issued registrable as to
principal or as to both principal and interest and shall or may be
made redeemable before maturity, at the option of the district or
may contain a mandatory redemption provision all as may be provided
by the board. A district's bonds may be issued in the form,
denominations, and manner and under the terms, conditions, and
details, and shall be signed and executed, as provided by the board
in the resolution or order authorizing their issuance.
Added by Acts 1971, 62nd Leg., p. 795, ch. 84, § 1.
§ 54.503. MANNER OF REPAYMENT OF BONDS. The board may
provide for the payment of principal of and interest and redemption
price on the bonds in any one of the following manners:
(1) from the levy and collection of ad valorem taxes on
all taxable property within the district;
(2) by pledging all or any part of the designated
revenues to result from the ownership or operation of the
district's works, improvements, facilities, plants, equipment, and
appliances or under specific contracts for the period of time the
board determines;
(3) by pledging all or part of any funds or revenues
available to the district; or
(4) a combination of the sources set forth in
Subdivisions (1), (2), and (3) of this section.
Added by Acts 1971, 62nd Leg., p. 795, ch. 84, § 1. Amended by
Acts 2003, 78th Leg., ch. 248, § 30, eff. June 18, 2003.
§ 54.504. ADDITIONAL SECURITY FOR BONDS. (a) The
bonds, within the discretion of the board, may be additionally
secured by a deed of trust or mortgage lien on part or all of the
physical properties of the district, and franchises, easements,
water rights, and appropriation permits, leases, and contracts and
all rights appurtenant to such properties, vesting in the trustee
power to sell the properties for payment of the indebtedness, power
to operate the properties, and all other powers and authority
necessary for the further security of the bonds.
(b) The trust indenture, regardless of the existence of the
deed of trust or mortgage lien on the properties, may contain
provisions prescribed by the board for the security of the bonds and
the preservation of the trust estate, and may make provisions for
amendment or modification, and may condition the right to spend
district money or sell district property on approval of a
registered professional engineer selected as provided in the trust
indenture and may make provisions for investment of funds of the
district.
(c) Any purchaser under a sale under the deed of trust or
mortgage lien, where one is given, shall be absolute owner of the
properties, facilities, and rights purchased and shall have the
right to maintain and operate them.
Added by Acts 1971, 62nd Leg., p. 796, ch. 84, § 1.
§ 54.505. ELECTION ON TAX BONDS. Bonds payable solely
from revenues may be issued by resolution or order of the board
without an election, but no bonds, except refunding bonds, payable
wholly or partially from ad valorem taxes shall be issued until
authorized by a majority vote of the resident electors of the
district voting in an election called and held for that purpose. An
election is not required to pledge revenues to the payment of bonds.
Added by Acts 1971, 62nd Leg., p. 796, ch. 84, § 1. Amended by
Acts 2003, 78th Leg., ch. 248, § 31, eff. June 18, 2003.
§ 54.507. NOTICE OF BOND ELECTION. (a) Repealed by
Acts 1995, 74th Leg., ch. 715, § 43, eff. Sept. 1, 1995.
(b) All or any part of any facilities or improvements which
may be acquired by a district by the issuance of its bonds may be
included in one single proposition to be voted on at the election or
the bonds may be submitted in several propositions. A bond election
may also be held on the same day as the confirmation election. The
bond election may be called by a separate election order or as a
part of the order calling the confirmation election.
(c) If a majority of the votes cast at the election are in
favor of the issuance of the bonds, the bonds may be issued by the
board if the confirmation election results favorably to the
confirmation of the district.
Added by Acts 1971, 62nd Leg., p. 796, ch. 84, § 1. Amended by
Acts 1995, 74th Leg., ch. 715, § 43, eff. Sept. 1, 1995.
§ 54.510. PROVISIONS OF BONDS. (a) In the orders or
resolutions authorizing the issuance of bonds, including refunding
bonds, the board may provide for the flow of funds, the
establishment and maintenance of the interest and sinking fund, the
reserve fund, and other funds, and may make additional covenants
with respect to the bonds and the pledged revenues and the operation
and maintenance of those works, improvements, plants, facilities,
equipment, and appliances the revenue of which is pledged,
including provisions for the operation or for the leasing of all or
any part of the improvements and the use or pledge of money derived
from the operation contracts and leases, as the board may consider
appropriate.
(b) The orders or resolutions of the board authorizing the
issuance of bonds may also prohibit the further issuance of bonds or
other obligations payable from the pledged revenue or may reserve
the right to issue additional bonds to be secured by a pledge of and
payable from the revenue on a parity with or subordinate to the lien
and pledge in support of the bonds being issued, subject to the
conditions which may be set forth in the orders or resolutions.
(c) The orders or resolutions of the board issuing bonds may
contain other provisions and covenants as the board may determine,
not prohibited by the Constitution or by this chapter.
(d) The board may adopt and cause to be executed any other
proceedings or instruments necessary and convenient in the issuance
of bonds.
Added by Acts 1971, 62nd Leg., p. 797, ch. 84, § 1.
§ 54.512. SALE OR EXCHANGE OF BONDS. (a) The board
shall sell the bonds on the best terms and for the best possible
price but none of the bonds may be sold for less than 95 percent of
face value.
(b) The district may exchange bonds for property acquired by
purchase or in payment of the contract price of work done or
services performed for the use and benefit of the district.
Added by Acts 1971, 62nd Leg., p. 797, ch. 84, § 1.
§ 54.514. REFUNDING BONDS. (a) A district may issue
bonds to refund all or any part of its outstanding bonds, notes, or
other obligations including matured but unpaid interest coupons.
(b) Refunding bonds shall mature serially or otherwise not
more than 40 years from their date and shall bear interest at any
rate or rates permitted by the Constitution and laws of the state.
(c) Refunding bonds may be payable from the same source as
the bonds, notes, or other obligations being refunded or from other
additional sources.
(d) The refunding bonds shall be approved by the attorney
general as in the case of other bonds and shall be registered by the
comptroller on the surrender and cancellation of the bonds being
refunded.
(e) The orders or resolutions authorizing the issuance of
the refunding bonds may provide that they shall be sold and the
proceeds deposited in the place or places where the bonds being
refunded are payable, in which case the refunding bonds may be
issued before the cancellation of the bonds being refunded provided
an amount sufficient to pay the interest on and principal of the
bonds being refunded to their maturity dates, or to their option
dates if the bonds have been duly called for payment prior to
maturity according to their terms, has been deposited in the place
or places where the bonds being refunded are payable. The
comptroller shall register them without the surrender and
cancellation of bonds being refunded.
(f) A refunding may be accomplished in one or in several
installment deliveries. Refunding bonds and their interest coupons
shall be investment securities under the provisions of Article 8 of
the Business & Commerce Code.
(g) In lieu of the method set forth in Section 54.514(a)-(f)
of this code, a district may refund bonds, notes, or other
obligations as provided by the general laws of the state.
Added by Acts 1971, 62nd Leg., p. 798, ch. 84, § 1.
§ 54.5161. REVIEW OF BOND PROJECTS BY
COUNTIES. (a) Before the commission gives final approval on any
bond issue for the purpose of financing a project of a district
located wholly or partly outside the extraterritorial jurisdiction
of a city, the commission shall notify the county commissioners of
the county in which the district is located that an application has
been filed and give the county an opportunity within 30 days after
notification to examine all information on file and submit a
written opinion from the commissioners court stating any findings,
conclusions, or other information that the commissioners court
considers important to the commission's final determination.
(b) In passing on the approval of a bond issue under this
section, if a written opinion is submitted by the commissioners
court, the commission shall consider the written opinion before
taking final action.
Added by Acts 1975, 64th Leg., p. 1294, ch. 485, § 3, eff. Sept.
1, 1975.
§ 54.518. MANDAMUS BY BONDHOLDERS. In addition to all
other rights and remedies provided by the laws of the state, in the
event the district defaults in the payment of principal, interest,
or redemption price on its bonds when due, or in the event it fails
to make payments into any fund or funds created in the order or
resolution authorizing the issuance of the bonds, or defaults in
the observation or performance of any other covenants, conditions,
or obligations set forth in the resolution or order authorizing the
issuance of its bonds, the owners of any of the bonds shall be
entitled to a writ of mandamus issued by a court of competent
jurisdiction compelling and requiring the district and its
officials to observe and perform the covenants, obligations, or
conditions prescribed in the order or resolution authorizing the
issuance of the district's bonds.
Added by Acts 1971, 62nd Leg., p. 799, ch. 84, § 1.
§ 54.520. CANCELLATION OF UNSOLD BONDS. (a) The
board, by order or resolution, may provide for the cancellation of
all or any part of any bonds which have been submitted to and
approved by the attorney general and registered by the comptroller,
but not yet sold, and provide for the issuance of new bonds in lieu
of the old bonds in the manner as provided by law for the issuance of
the original bonds including their approval by the attorney general
and their registration by the comptroller.
(b) The order or resolution of the board shall describe the
bonds to be cancelled, and shall also describe the new bonds to be
issued in lieu of the old bonds.
(c) A certified copy of the order or resolution of the board
providing for the cancellation of the old bonds, together with the
old bonds, shall be delivered to the comptroller, who shall cancel
and destroy the old bonds and make a record of the cancellation.
Added by Acts 1971, 62nd Leg., p. 800, ch. 84, § 1.
§ 54.521. USE OF BOND PROCEEDS TO PAY CERTAIN
INTEREST. The district may use bond proceeds to pay or to
establish a reasonable reserve to pay not more than three years'
interest on the notes and bonds of the district as provided in the
bond orders or resolutions.
Added by Acts 1979, 66th Leg., p. 882, ch. 402, § 1, eff. Aug. 27,
1979.
§ 54.522. BONDS FOR STREET REPAIR OR
MAINTENANCE. (a) The legislature finds that the condition of
streets affects:
(1) the control, storage, preservation, and
distribution of the state's storm and flood waters;
(2) the control, abatement, or change of any shortage
or harmful excess of water; and
(3) a municipal utility district's ability to
accomplish its purposes.
(b) It is the policy of the state to authorize a municipal
utility district in certain circumstances to take action that is
necessary to prevent the condition of a street within the district
from adversely affecting the control, storage, preservation, and
distribution of the state's storm and flood waters, adversely
affecting the control, abatement, or change of any shortage or
harmful excess of water, or otherwise impeding a district's ability
to accomplish its purposes.
(c) A district created by general law or special act of the
legislature in existence for at least 10 years may issue bonds for
the purpose of repairing or maintaining streets within the district
if the bonds are authorized by a majority vote of the resident
electors of the district voting in an election called and held for
that purpose.
(d) An election required by this section must be held on the
uniform election date in November authorized by Section 41.001,
Election Code. Notwithstanding Section 41.003, Election Code, an
election under this section may be held on the date of the general
election for state and county officers.
Added by Acts 1997, 75th Leg., ch. 520, § 2, eff. Sept. 1, 1997.
SUBCHAPTER G. TAXES
§ 54.601. TAX LEVY FOR BONDS. At the time bonds payable
in whole or in part from taxes are issued, the board shall levy a
continuing direct annual ad valorem tax for each year while all or
part of the bonds are outstanding on all taxable property within the
district in sufficient amount to pay the interest on the bonds as it
becomes due and to create a sinking fund for the payment of the
principal of the bonds when due or the redemption price at any
earlier required redemption date and to pay the expenses of
assessing and collecting the taxes.
Added by Acts 1971, 62nd Leg., p. 801, ch. 84, § 1.
§ 54.602. ESTABLISHMENT OF TAX RATE IN EACH
YEAR. (a) Repealed by Acts 1979, 66th Leg., p. 2330, ch. 841,
§ 6(a)(3), eff. Jan. 1, 1982.
(b) In determining the actual rate to be levied in each
year, the board shall consider among other things:
(1) the amount which should be levied for maintenance
and operation purposes, if a maintenance tax has been authorized;
(2) the amount which should be levied for the payment
of principal, interest, and redemption price of each series of
bonds or notes payable in whole or in part from taxes;
(3) the amount which should be levied for the purpose
of paying all other contractual obligations of the district payable
in whole or in part from taxes; and
(4) the percentage of anticipated tax collections and
the cost of collecting the taxes.
(c) In determining the amount of taxes which should be
levied each year, the board may consider whether proceeds from the
sale of bonds have been placed in escrow to pay interest during
construction and whether the board reasonably expects to have
revenue or receipts available from other sources which are legally
available to pay principal of or interest or redemption price on the
bonds. The board shall levy a tax in the first full year after
issuance of its first series of bonds.
Added by Acts 1971, 62nd Leg., p. 801, ch. 84, § 1. Amended by
Acts 1979, 66th Leg., p. 2330, ch. 841, § 6(a)(3), eff. Jan. 1,
1982.
§ 54.603. MANDAMUS BY BONDHOLDERS. In the event the
board fails or refuses to levy a sufficient tax in each year which,
together with other revenues or receipts which may be legally used
for these purposes, will be sufficient to pay the required
principal of or interest or redemption price on the bonds, notes, or
other contractual obligations when due, or to pay the district's
other contractual obligations payable from taxes in addition to all
other remedies which may be available, the owner of the district's
bonds, notes, or other contractual obligations shall be entitled to
a writ of mandamus issued by a court of competent jurisdiction to
compel the board to levy a sufficient tax to meet the district's
obligations to the owners of its bonds, notes, or other contractual
obligations.
Added by Acts 1971, 62nd Leg., p. 801, ch. 84, § 1.
§ 54.604. ASSESSMENT AND COLLECTION OF DISTRICT
TAXES. The assessor and collector shall assess and collect taxes
for the district.
Added by Acts 1971, 62nd Leg., p. 801, ch. 84, § 1. Amended by
Acts 1979, 66th Leg., p. 2321, ch. 841, § 4(r), eff. Jan. 1,
1982.
SUBCHAPTER H. ADDING AND EXCLUDING TERRITORY; CONSOLIDATING AND
DISSOLVING DISTRICTS
§ 54.728. CONSOLIDATION OF DISTRICTS. Two or more
districts governed by the provisions of this chapter may
consolidate into one district as provided by Sections 54.729-54.733
of this code.
Added by Acts 1971, 62nd Leg., p. 810, ch. 84, § 1.
§ 54.729. ELECTIONS TO APPROVE
CONSOLIDATION. (a) After the board of each district has agreed on
the terms and conditions of consolidation, which may include the
assumption by each district of the bonds, notes, or other
obligations and voted but unissued bonds of the other consolidating
districts payable in whole or in part from taxation, the levy of
taxes to pay for the bonds, and adoption of a name for the
consolidated district, the board shall order an election in each
district to determine whether the districts should be consolidated.
(b) The directors of each district shall order the election
to be held on the same day in each district and shall give notice of
the election for the time and in the manner provided by law for bond
elections.
(c) The districts may be consolidated only if the electors
in each district vote in favor of the consolidation.
Added by Acts 1971, 62nd Leg., p. 810, ch. 84, § 1. Amended by
Acts 1995, 74th Leg., ch. 715, § 19, eff. Sept. 1, 1995.
§ 54.730. GOVERNING CONSOLIDATED DISTRICTS. (a) After
two or more districts are consolidated, they become one district
and are governed as one district, except for the payment of debts
created before consolidation if the conditions of consolidation do
not provide for the assumption by each district of the bonds, notes,
or other obligations and voted but unissued bonds of the other
consolidating districts.
(b) During a period of 90 days after the date of the election
to approve consolidation, the officers of each district shall
continue to act jointly as officers of the original districts to
settle the affairs of their respective districts.
(c) The consolidation agreement may provide that the
officers of the original districts shall continue to act jointly as
officers of the consolidated district until the next general
election or name persons to serve as officers of the consolidated
district until the next general election if all officers of the
original districts agree to resign. At the next general election,
directors will be elected for the consolidated district in the same
manner and for the same term as directors elected at a confirmation
election.
(d) New officers of the consolidated district must qualify
as officers of the district within the period of 90 days after the
election and shall assume their offices at the expiration of the
90-day period.
(e) The current board shall approve the bond of each new
officer.
Added by Acts 1971, 62nd Leg., p. 810, ch. 84, § 1. Amended by
Acts 1995, 74th Leg., ch. 715, § 20, eff. Sept. 1, 1995.
§ 54.731. DEBTS OF ORIGINAL DISTRICTS. (a) After two
or more districts are consolidated, the debts of the original
districts shall be protected and may not be impaired. These debts
may be paid by taxes levied on the land in the original districts as
if they had not consolidated or from contributions from the
consolidated district on terms stated in the consolidation
agreement.
(b) If each district assumed the other's bonds, notes, and
other obligations, taxes may be levied uniformly on all taxable
property within the consolidated district in payment of the debts.
Added by Acts 1971, 62nd Leg., p. 811, ch. 84, § 1.
§ 54.732. ASSESSMENT AND COLLECTION OF TAXES. After
consolidation, the district shall assess and collect taxes on
property in the original districts to pay debts created by the
original districts unless each district has assumed the bonds,
notes, or other indebtedness payable in whole or in part from
taxation of the other consolidating districts.
Added by Acts 1971, 62nd Leg., p. 811, ch. 84, § 1. Amended by
Acts 1995, 74th Leg., ch. 715, § 21, eff. Sept. 1, 1995.
§ 54.733. VOTED BUT UNISSUED BONDS. In the event any
consolidating district has voted but unissued bonds payable in
whole or in part from taxation and the consolidated district
assumed the voted but unissued bonds and the consolidated district
was authorized to levy taxes to pay for the bonds, then the
consolidated district shall be authorized to issue the voted but
unissued bonds in the name of the consolidated district and levy a
uniform tax on all taxable property in the consolidated district to
pay for the bonds.
Added by Acts 1971, 62nd Leg., p. 811, ch. 84, § 1. Amended by
Acts 1995, 74th Leg., ch. 715, § 22, eff. Sept. 1, 1995.
§ 54.734. DISSOLUTION OF DISTRICT PRIOR TO ISSUANCE OF
BONDS. (a) If the board considers it advisable before the
issuance of any bonds, notes, or other indebtedness, the board may
dissolve the district and liquidate the affairs of the district as
provided in Sections 54.734-54.738 of this code.
(b) If a majority of the board finds at any time before the
authorization of bonds, notes, or other obligations or the final
lending of its credit in another form that the proposed undertaking
for any reason is impracticable or apparently cannot be
successfully and beneficially accomplished, the board may issue
notice of a hearing on a proposal to dissolve the district.
Added by Acts 1971, 62nd Leg., p. 811, ch. 84, § 1.
§ 54.735. NOTICE OF HEARING. The board shall post
notice of the hearing on the bulletin board at the courthouse door
of each county in which the district is located and at three or more
other public places within the boundaries of the district and shall
publish notice of the hearing two times in a newspaper with general
circulation in the district. The notice must be posted and
published at least 14 days before the hearing on the proposed
dissolution of the district.
Added by Acts 1971, 62nd Leg., p. 811, ch. 84, § 1.
§ 54.736. HEARING. The board shall hear all interested
persons and shall consider their evidence at the time and place
stated in the notice.
Added by Acts 1971, 62nd Leg., p. 812, ch. 84, § 1.
§ 54.737. BOARD'S ORDER TO DISSOLVE DISTRICT. If the
board unanimously determines from the evidence that the best
interests of the persons and property in the district will be served
by dissolving the district, the board shall enter the appropriate
findings and order in its records dissolving the district.
Otherwise the board shall enter its order providing that the
district has not been dissolved.
Added by Acts 1971, 62nd Leg., p. 812, ch. 84, § 1.
§ 54.738. JUDICIAL REVIEW OF BOARD'S ORDER. The board's
decree to dissolve the district may be judicially reviewed in the
manner set forth in Sections 54.708-54.710 of this code for the
review of an order excluding land from the district.
Added by Acts 1971, 62nd Leg., p. 812, ch. 84, § 1.
§ 54.739. SUBSTITUTING LAND OF EQUAL VALUE. After the
district is organized and acquires facilities with which to
function for the purposes for which it was organized, and votes,
issues and sells bonds for such purposes, land within the district
boundaries subject to taxation that does not need or utilize the
services of the district may be excluded and other land not within
the boundaries of the district may be included within the
boundaries of the district without impairment of the security for
payment of the bonds or invalidation of any prior bond election, as
provided by this section and Sections 54.740 through 54.747.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
Amended by Acts 2003, 78th Leg., ch. 248, § 32, eff. June 18,
2003.
§ 54.740. REQUISITES FOR APPLICATION FOR EXCLUSION. An
owner of land in the district not receiving services from the
district may apply for its exclusion from the district boundaries
if all taxes levied and assessed by the district on the land to be
excluded have been fully paid. The application shall set forth
facts concerning the land proposed for exclusion, including
evidence of the reasonable market value of the land, and state that
the other requisites for the exclusion of the land and substitution
of other land have been fulfilled or will be fulfilled at the
hearing on the application. The application shall be verified and
acknowledged in a recordable form as conveyances of real property.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
§ 54.741. INCLUSION OF SUBSTITUTE LAND REQUIRED. An
application for exclusion can only be considered by the board if an
application is filed by an owner of other land lying outside the
boundaries of the district seeking inclusion of land that can be
served in a practical manner by the district of at least equal value
to the land proposed for exclusion. Such land must be included
within the district boundaries and taxing jurisdiction of the
district simultaneously with the exclusion of the land proposed for
exclusion. Such included land must be of sufficient acreage to
avoid an impairment of the security for payment of voted and issued
bonds and any other contract obligations payable or secured, in
whole or in part, from ad valorem taxes or revenues of the district.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
§ 54.742. APPLICATION FOR INCLUSION. The application
submitted by an owner of land proposed for inclusion shall set forth
that the owner of the new land assumes the payment of all taxes,
assessments, and fees levied on the land and assessed by the
district after the date the land is included in the district. The
application shall also set forth an agreement by the owner of the
land proposed for inclusion that the land will be subject to future
taxes for bond tax and other assessments and fees levied and
assessed by the district and be subject to the same liens and
provisions and statutes governing all other lands in the district
as though the land had been incorporated originally in the
district. The application for inclusion shall be verified and
acknowledged in a recordable form as conveyances of real property.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
§ 54.743. NOTICE OF HEARING AND HEARING PROCEDURES. The
board shall give notice of the hearing on the applications for
exclusion and inclusion in conformity with the notice and hearing
requirements otherwise applicable to exclusions or additions of
land. The board at such hearing shall hear all interested parties
and all evidence in connection with the applications.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
§ 54.744. IMPAIRMENT OF SECURITY. For purposes of the
board's consideration of the applications, the lands proposed for
inclusion shall be deemed to be sufficient to avoid an impairment of
the security for payment of obligations of the district if:
(1) according to the most recent tax roll of the
district or the most recently certified estimates of taxable value
from the chief appraiser of the appropriate appraisal district, the
taxable value of such included lands equals or exceeds the taxable
value of the excluded lands;
(2) either the estimated costs of providing district
facilities and services to such included lands is equal to or less
than the estimated costs of providing district facilities and
services to the excluded lands or any increased estimated costs of
providing district facilities and services to the included land, as
determined by the district's engineer, can be amortized at
prevailing bond interest rates and maturity schedules and the
prevailing debt service tax rate of the district, as determined by
the district's professional financial advisor, when applied to the
increase in taxable value of the included land over the taxable
value of the excluded land; and
(3) the district's outstanding bonds or contract
obligations are payable in whole or in part by a pledge of net
revenues from the ownership or operation of the district's
facilities, and the projected net revenues to be derived from the
lands to be included during the succeeding 12-month period, as
determined by the district's engineer, equals or exceeds the
projected net revenues that would otherwise have been derived from
the lands to be excluded during the same period.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
Amended by Acts 2003, 78th Leg., ch. 248, § 32, eff. June 18,
2003.
§ 54.745. BOARD'S RESOLUTION TO SUBSTITUTE. If the
board finds that all the conditions provided for the exclusion of
land and inclusion of other land in the district exist and that it
is in the best interest of the district to grant such applications,
it may adopt and enter in its minutes a resolution and order
excluding all or part of the land proposed for exclusion and
including all or part of the land proposed for inclusion. Prior to
the effective date of the exclusion and inclusion of lands, the
district shall have received payment of all fees, charges,
assessments, taxes, together with any associated penalties and
interest due or overdue in respect to the lands excluded, and if no
ad valorem taxes or fees have yet been established by the district
for the current year, an amount determined by the district to equal
the estimated ad valorem taxes and standby fees to be established by
the district for the current year, prorated to the date of exclusion
with respect to such excluded lands, shall also be paid.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
§ 54.746. LIABILITY OF EXCLUDED AND INCLUDED LAND. The
land excluded from the district is free from any lien or liability
created on the excluded land by reason of its having been included
in the district. Land included in the district is subject to all
laws, liens, and provisions governing the district and the land in
the district.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
§ 54.747. SERVICE TO INCLUDED LAND. The district has
the same right and obligation to furnish services to the included
land that it previously had to furnish to the excluded land.
Added by Acts 1995, 74th Leg., ch. 715, § 23, eff. Sept. 1, 1995.
§ 54.748. EXCLUSION OF LAND FOR FAILURE TO PROVIDE
SUFFICIENT SERVICES; BONDS OUTSTANDING. (a) This section
applies only to a district that has a total area of more than 5,000
acres.
(b) The board shall call a hearing on the exclusion of land
from the district on a written petition filed with the secretary of
the board by a landowner whose land has been included in and taxable
by the district for more than 28 years if any bonds issued by the
district payable in whole or in part from taxes of the district are
outstanding and the petition:
(1) includes a signed petition evidencing the consent
of the owners of a majority of the acreage proposed to be excluded,
as reflected by the most recent certified tax roll of the district;
(2) includes a claim that the district has not
provided the land with utility services;
(3) describes the property to be excluded;
(4) provides, at the petitioner's expense, facts
necessary for the board to make the findings required by Subsection
(c); and
(5) is filed before August 31, 2005.
(c) The board may exclude land under this section only on
finding that:
(1) the district has never provided utility services
to the land described by the petition;
(2) the district has imposed a tax on the land for more
than 28 years;
(3) all taxes the district has levied and assessed
against the land and all fees and assessments the district has
imposed against the land or the owner that are due and payable on or
before the date of the petition are fully paid; and
(4) the executive director has reviewed the economic
impact of the proposed exclusion of land and does not oppose the
exclusion.
(d) If evidence presented at the hearing conclusively
demonstrates that the requirements and grounds for exclusion
described by Subsections (b) and (c) have been met, the board may
enter an order excluding the land from the district. If the board
enters an order excluding the land, the board shall redefine in the
order the boundaries of the district to embrace all land not
excluded.
(e) A copy of an order excluding land and redefining the
boundaries of the district shall be filed in the deed records of the
county in which the district is located.
(f) The exclusion of land under this section does not impair
the rights of holders of any outstanding bonds, warrants, or other
certificates of indebtedness of the district.
(g) After any land is excluded under this section, the
district may issue any unissued additional debt approved by the
voters of the district before exclusion of the land under this
section without holding a new election. Additional debt issued
after land is excluded from the district may not be payable from and
does not create a lien against the taxable value of the excluded
land.
(h) For purposes of this section and Section 54.749, "land"
includes any improvements to the land, and when used in the context
of property taxes, "land" has the meaning assigned to "real
property" by Section 1.04, Tax Code.
Added by Acts 2003, 78th Leg., ch. 248, § 33, eff. June 18, 2003.
§ 54.749. TAX LIABILITY OF EXCLUDED LAND; BONDS
OUTSTANDING. (a) Land excluded from the district under Section
54.748 that is pledged as security for any outstanding debt of the
district remains pledged for its pro rata share of the debt until
final payment is made. The district shall continue to levy and
collect taxes on the excluded land at the same rate levied on land
remaining in the district until the amount of taxes collected from
the excluded land equals the land's pro rata share of the district's
debt outstanding at the time the land was excluded from the
district.
(b) The district shall apply the taxes collected on the
excluded land only to the payment of the excluded land's pro rata
share of the debt.
Added by Acts 2003, 78th Leg., ch. 248, § 33, eff. June 18, 2003.
SUBCHAPTER J. SERVICES FOR CERTAIN DEFINED AREAS AND DESIGNATED
PROPERTY
§ 54.801. AUTHORITY TO ESTABLISH DEFINED AREAS OR
DESIGNATED PROPERTY. (a) A district that is composed of at least
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.
(b) The board shall state in its designation the physical
and economic reasons, the particular diverse local needs, or the
comparative potential benefits of the defined areas or designated
property in the district that make it necessary or equitable to levy
all or part of the tax on a defined area or designated property of
the district.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
§ 54.802. DEFINING AREA AND DESIGNATING PROPERTY TO BE
BENEFITED BY IMPROVEMENTS. (a) The board shall adopt a proposed
plan that defines the particular area to be taxed by metes and
bounds or designates the property to be served, affected, and
taxed.
(b) The board shall adopt a proposed plan for improvements
in the defined area or to serve the designated property in the
manner provided by Section 49.106.
(c) The board shall adopt a proposed plan of taxation to
apply to the defined area or designated property that may or may not
be in addition to other taxes imposed by the district on the same
area or property.
Added by Acts 1987, 70th, Leg., ch. 600, § 1, eff. Aug. 31, 1987.
Amended by Acts 1997, 75th Leg., ch. 1070, § 32, eff. Sept. 1,
1997.
§ 54.803. NOTICE OF ADOPTION OF PLANS FOR DEFINED AREA OR
DESIGNATED PROPERTY AND HEARING. (a) After proposed plans for a
defined area or designated property are adopted, the board shall
publish notice of the adoption once a week for two consecutive weeks
in one or more newspapers with general circulation in the county or
counties in which the district is located.
(b) The notice must state:
(1) that proposed plans for a defined area or
designated property have been adopted;
(2) that a map and description of the area or property
is available for public inspection in the district's office;
(3) that a hearing on the proposed plans will be held
by the board at a specified place and at a particular time; and
(4) that all interested persons may appear and support
or oppose all or part of the proposed plans and offer testimony.
(c) A hearing for which notice is required by this section
must be held not less than 15 days and not more than 20 days after
the date on which the first notice is published.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
§ 54.804. ORDER ADOPTING PLANS FOR DEFINED AREA OR
DESIGNATED PROPERTY. (a) After the hearing is completed, the
board may approve the proposed plans for the defined area or
designated property or may modify the proposed plans.
(b) If the board adopts a proposed plan, it must adopt the
definition or designation that it finds, according to the evidence
before the board, most equitably distributes the cost of facilities
or service and protects the public welfare.
(c) If the proposal includes the issuance of bonds or the
imposition of a maintenance tax for the defined area or designated
property, the board shall call and hold an election in the defined
area or within the boundaries of the designated property only.
(d) The board's order is not subject to judicial review
except on the ground of fraud, palpable error, or arbitrary and
confiscatory abuse of discretion.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
Amended by Acts 1989, 71st Leg., ch. 973, § 1, eff. Aug. 28,
1989.
§ 54.805. OBTAINING FUNDS TO CONSTRUCT, ADMINISTER,
MAINTAIN, AND OPERATE IMPROVEMENTS AND FACILITIES IN DEFINED AREAS
OR DESIGNATED PROPERTY. On adoption of the plans as provided by
Section 54.804 of this code and voter approval of 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.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
§ 54.806. PROCEDURE FOR ELECTION. (a) Before 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.
(b) The board may submit the issues to the voters on the same
ballot to be used in another election.
(c) The notice of election must describe the area to be
defined or property to be designated and must otherwise conform to
the provisions of this chapter relating to notice of bond
elections.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
Amended by Acts 1997, 75th Leg., ch. 1070, § 33, eff. Sept. 1,
1997.
§ 54.807. BALLOTS. The ballot proposition for an
election under this subchapter must be printed to provide for
voting for or against defining the area or designating the property
and, if applicable, issuing bonds and levying a tax to retire the
bonds or imposing a maintenance tax not to exceed the rate, which
must be specified in the ballot proposition, provided by the
proposed plans.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
Amended by Acts 1989, 71st Leg., ch. 973, § 2, eff. Aug. 28,
1989.
§ 54.808. DECLARING RESULT AND ISSUING ORDER. (a) If a
majority of the voters voting at the election approve the
proposition, the board shall declare the results and, by order,
shall establish the defined area and describe it by metes and bounds
or designate the specific property and shall set the tax rate for
the area or property as otherwise provided by the Tax Code.
(b) A certified copy of the order shall be recorded in the
minutes of the district and shall constitute notice.
(c) If a majority of the voters voting at the election fail
to approve the proposition, the board may not establish the defined
area or designate the property.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
§ 54.809. ISSUANCE OF BONDS AND LEVY OF TAX FOR DEFINED
AREA OR DESIGNATED PROPERTY. After the order is recorded, the
district may issue its bonds to provide the specific plant, works,
and facilities included in the plans adopted for the defined area,
or to serve the designated property and shall provide the plant,
works, and facilities.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
§ 54.810. LIMITATION ON OTHER BOND AUTHORIZATIONS. If
the voters of the designated area authorize the issuance of bonds
for a particular purpose, a district may not issue bonds from any
other authorization for the same purposes, and only revenue and
taxes from the designated area may be used to retire the bonds.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
§ 54.811. PLEDGE OF FAITH AND CREDIT. If at an
election, the voters approve the issuance of bonds and the levy of a
tax that applies only to a designated area, the district may issue
bonds that pledge only the faith and credit based on the property
values in the defined area and may not pledge the full faith and
credit of the district.
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
§ 54.812. NOTICE TO PURCHASERS. (a) A person who sells
or conveys real property located within the designated area of the
district shall supplement the notice to purchaser required by
Section 50.301, of this code, as provided by this section.
(b) The prescribed notice shall be inserted into the general
notice after the first sentence and shall read as follows: "The
real property described below, which you are about to purchase, is
also located within a designated area of the district and your land
will be subject to a higher tax than other land within the district.
Your rate of taxes will be higher by $______ on each $100 of
assessed valuation than land not within the designated area."
Added by Acts 1987, 70th Leg., ch. 600, § 1, eff. Aug. 31, 1987.
