SPECIAL DISTRICT LOCAL LAWS CODE


TITLE 6. WATER AND WASTEWATER


SUBTITLE C. SPECIAL UTILITY DISTRICTS


CHAPTER 7201. AGUA SPECIAL UTILITY DISTRICT


SUBCHAPTER A. GENERAL PROVISIONS


Sec. 7201.001. DEFINITIONS. Unless the context otherwise requires, in this chapter:

(1) "Board" means the board of directors of the district.

(2) "Corporation" means the La Joya Water Supply Corporation.

(3) "Director" means a member of the board.

(4) "District" means the Agua Special Utility District.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1430 (S.B. 3), Sec. 9.02, eff. June 16, 2007.

Sec. 7201.002. NATURE OF CORPORATION AND DISTRICT. (a) The corporation is a water supply corporation in Hidalgo and Starr Counties created under and essential to accomplish the purposes of Section 59, Article XVI, Texas Constitution, and operating in accordance with Chapter 67, Water Code.

(b) The district is:

(1) a special utility district in Hidalgo and Starr Counties created under and essential to accomplish the purposes of Section 59, Article XVI, Texas Constitution, and operating in accordance with Chapters 49 and 65, Water Code;

(2) a retail public utility as defined by Section 13.002, Water Code; and

(3) the successor in interest to the corporation.

(c) The corporation shall be dissolved and succeeded without interruption by the district as provided by Subchapter A1.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1430 (S.B. 3), Sec. 9.03, eff. June 16, 2007.

Sec. 7201.003. APPLICABILITY OF OTHER LAW. Except as otherwise provided by this chapter, Chapters 49 and 65, Water Code, including Sections 49.211(a) and 65.201(a), Water Code, apply to the district.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Sec. 7201.004. REGULATORY CONFLICTS. (a) If a municipality asserts regulatory authority over any geographic area in the district and a municipal regulation applicable to that geographic area conflicts with a rule of the district, the regulation of the municipality prevails.

(b) This section does not apply to:

(1) rules or regulations concerning potable water quality standards; or

(2) conflicts relating to service areas or certificates issued to the corporation or district by the Public Utility Commission of Texas or the Texas Commission on Environmental Quality.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 2.88, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 171 (S.B. 567), Sec. 88, eff. September 1, 2013.

Sec. 7201.005. INITIAL DISTRICT TERRITORY. (a) The district is composed of the territory described by Section 9.12 of the Act enacted by the 80th Legislature, Regular Session, 2007, amending this subsection.

(b) The boundaries and field notes contained in Section 9.12 of the Act enacted by the 80th Legislature, Regular Session, 2007, amending this subsection form a closure. A mistake made in the field notes or in copying the field notes in the legislative process does not affect:

(1) the organization, existence, or validity of the district;

(2) the right of the district to issue bonds; or

(3) the legality or operation of the district.

(c) District boundaries may be modified in accordance with Chapters 13 and 49, Water Code, except that the boundaries must include all territory in any area included under a certificate of convenience and necessity issued by the Public Utility Commission of Texas or the Texas Commission on Environmental Quality to the district.

(d) The territory of the district does not include and the district does not have jurisdiction over land that has never been in the service area of the corporation regardless of any erroneous inclusion of that land in the boundaries and field notes in Section 9.12 of the Act enacted by the 80th Legislature, Regular Session, 2007, amending this section.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1430 (S.B. 3), Sec. 9.04, eff. June 16, 2007.

Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 2.89, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 171 (S.B. 567), Sec. 89, eff. September 1, 2013.

SUBCHAPTER B. BOARD OF DIRECTORS


Sec. 7201.0512. INITIAL BOARD TRAINING. (a) Not later than the 60th day after the first date on which all of the initial directors have been appointed, each initial director shall complete at least 12 hours of training on district management and compliance with laws applicable to the district as determined by the receiver for the corporation.

(b) The district shall reimburse an initial director for the reasonable expenses incurred by the director in attending the training.

Added by Acts 2007, 80th Leg., R.S., Ch. 1430 (S.B. 3), Sec. 9.08, eff. June 16, 2007.

Sec. 7201.0513. EDUCATION PROGRAM. (a) Before the first election of directors, the initial board shall establish a program of education for directors that includes information on:

(1) the history of the district;

(2) the district's enabling legislation;

(3) Chapters 49 and 65, Water Code, and other laws that apply to the district, including the requirements of the:

(A) open meetings law, Chapter 551, Government Code; and

(B) public information law, Chapter 552, Government Code;

(4) relevant legal developments related to water district governance;

(5) the duties and responsibilities of the board;

(6) the requirements of conflict of interest laws and other laws relating to public officials; and

(7) any applicable ethics policies adopted by the Texas Commission on Environmental Quality or the Texas Ethics Commission.

(b) The district shall pay any costs associated with the development of the education program from district revenue.

(c) The education program may include training provided by an organization offering courses that have been approved by the Texas Commission on Environmental Quality.

(d) The board may adopt bylaws modifying the education program as necessary to meet district needs.

Added by Acts 2007, 80th Leg., R.S., Ch. 1430 (S.B. 3), Sec. 9.08, eff. June 16, 2007.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 1, eff. September 1, 2019.

Sec. 7201.053. DISTRICT TREASURER. (a) The board shall elect from among its members one director to serve as district treasurer.

(b) The district treasurer shall comply with the training requirements provided by Section 49.1571, Water Code, for an investment officer of a district.

Added by Acts 2007, 80th Leg., R.S., Ch. 1430 (S.B. 3), Sec. 9.10, eff. June 16, 2007.

Sec. 7201.054. EDUCATION FOR DIRECTORS. (a) Except for an initial director whose term expires in 2008, each director shall complete the education program established under Section 7201.0513 before the first anniversary of the date on which the director was appointed or elected.

(b) The district shall reimburse a director for the reasonable expenses incurred by the director in attending the education program.

(c) A director who is elected to serve a subsequent term shall fulfill the education requirements specified by district bylaws.

Added by Acts 2007, 80th Leg., R.S., Ch. 1430 (S.B. 3), Sec. 9.10, eff. June 16, 2007.

Sec. 7201.055. COMPOSITION OF BOARD; TERMS. (a) The district is governed by a board of seven directors, each of whom occupies a numbered position on the board and represents a unique subdistrict containing, as near as practicable, one-seventh of the total number of residents in the district.

(b) A candidate for a position on the board must:

(1) reside in the subdistrict represented by that position; and

(2) be eligible to hold office under Section 141.001, Election Code.

(c) The district shall fill a vacancy on the board in accordance with Section 49.105, Water Code.

(d) Directors serve staggered terms of four years and may not serve more than two consecutive terms.

(e) A person who has served as a member of the board of directors of the corporation is not eligible to serve as a district director.

(f) If a director is an employee of another taxing entity within the district, the board may not employ as an employee, as a consultant, or on a contract basis:

(1) an elected official of the other taxing entity that employs the director; or

(2) a person related to that elected official in the third degree of consanguinity or affinity as determined under Chapter 573, Government Code.

Added by Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 2, eff. December 31, 2019.

Sec. 7201.056. FILING OF FINANCIAL STATEMENT BY DIRECTOR. (a) A director shall file the financial statement required of state officers under Subchapter B, Chapter 572, Government Code, with the Texas Ethics Commission.

(b) Subchapter B, Chapter 572, Government Code:

(1) applies to a director as if the director were a state officer; and

(2) governs the contents, timeliness of filing, and public inspection of a statement filed under Subsection (a).

(c) A director commits an offense if the director fails to file the statement required by Subsection (a). An offense under this subsection is a Class B misdemeanor.

Added by Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 3, eff. September 1, 2019.

Sec. 7201.057. SUBSTANTIAL BUSINESS INTEREST. For purposes of Chapter 171, Local Government Code, a director, in connection with a vote or decision by the board, is considered to have a substantial interest in a business entity if a person related to the director within the third degree by consanguinity or affinity, as determined under Chapter 573, Government Code, has a substantial interest in the business entity.

Added by Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 3, eff. September 1, 2019.

Sec. 7201.058. GROUNDS FOR REMOVAL. A director may be removed from the board if the director:

(1) does not have at the time of appointment the qualifications required by Section 7201.055(b);

(2) does not complete the initial board training required by Section 7201.0512;

(3) does not complete the education program required by Section 7201.054;

(4) does not meet the eligibility requirements under Section 7201.072; or

(5) fails to comply with Section 7201.071.

Added by Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 3, eff. September 1, 2019.

SUBCHAPTER B-1. DISTRICT ADMINISTRATION


Sec. 7201.071. PROHIBITED CONDUCT FOR DIRECTORS AND DISTRICT EMPLOYEES. A director or district employee may not:

(1) accept or solicit any gift, favor, or service that:

(A) might reasonably influence the director or employee in the discharge of an official duty; or

(B) the director or employee knows or should know is offered with the intent to influence the director's or employee's official conduct;

(2) accept other employment or engage in a business or professional activity that the director or employee might reasonably expect would require or induce the director or employee to disclose confidential information acquired in the course of the director's or employee's duties under this chapter;

(3) accept other employment or compensation that could reasonably be expected to impair the director's or employee's independent judgment in the performance of the director's or employee's duties under this chapter;

(4) make personal investments that could reasonably be expected to create a substantial conflict between the director's or employee's private interest and the interest of the district;

(5) intentionally or knowingly solicit, accept, or agree to accept a benefit for the director's or employee's exercise of powers under this chapter or performance of duties under this chapter in favor of a third party; or

(6) have a personal interest in an agreement executed by the district.

Added by Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 4, eff. September 1, 2019.

Sec. 7201.072. ELIGIBILITY OF DIRECTOR AND GENERAL MANAGER. (a) A person is not eligible to serve as a director or general manager of the district if the person or the person's relative within the third degree by consanguinity or affinity, as determined by Chapter 573, Government Code:

(1) received 10 percent or more of gross income for the previous year from a business entity or other organization, other than a governmental entity, that receives money from the district;

(2) is employed by or participates in the management of a business entity or other organization, other than a governmental entity, that receives money from the district;

(3) directly or indirectly owns or controls more than a 10 percent interest in the fair market value of a business or other organization that receives money from the district;

(4) serves as a corporate officer or member of the board of directors of a business entity or other organization that receives money from the district;

(5) is a creditor, debtor, or guarantor in an amount of $5,000 or more of a person or business entity that receives money from the district;

(6) uses or receives a substantial amount of tangible goods, services, or money from the district other than compensation or reimbursement authorized by law; or

(7) is required to register as a lobbyist under Chapter 305, Government Code, because of the person's activities for compensation on behalf of a profession related to the operation of the district.

(b) A person applying to serve as general manager of the district shall disclose any potential violations of Subsection (a) before accepting the position of general manager.

Added by Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 4, eff. September 1, 2019.

Sec. 7201.073. GENERAL MANAGER; DUTIES. (a) The board shall employ a person with prior experience and training as general manager.

(b) The duties of the general manager include:

(1) managing the overall strategy and operations of the district's projects, services, budget, finances, and community relations;

(2) consulting with, advising, and supporting the board to efficiently accomplish the purposes of the district and to ensure compliance with all regulatory, financing, and legal requirements;

(3) assisting the board in planning, developing, and implementing policies to accomplish the purposes of the district;

(4) developing and implementing policies to improve the district's communication with the district's service community;

(5) providing leadership and supervision to district employees;

(6) creating and maintaining organizational charts to improve the district's effectiveness;

(7) coordinating and developing short-term and long-term goals for the district;

(8) monitoring current district projects and prioritizing future district projects;

(9) evaluating contracts, grants, and commitments as authorized by the board;

(10) planning, organizing, and directing district programs and services, evaluating the results of those programs and services, and recommending policies, procedures, and board actions based on that evaluation;

(11) employing all persons necessary for the proper handling of the business and operation of the district and determining the compensation of those employees; and

(12) performing other general responsibilities as determined by the board.

(c) The board may assign the duties under Subsection (b) only to the general manager. The board may not assign the duties to any other person.

(d) The general manager is an employee of the district. The general manager serves at the pleasure of and reports only to the board.

(e) The board shall determine the compensation and terms of employment for the general manager.

(f) The board may increase the compensation of the general manager in an amount not to exceed 10 percent of the amount of the general manager's compensation immediately before the effective date of the increase.

(g) If the board enters into an employment contract with the general manager, the term of the contract may not exceed two years.

(h) It is a ground for termination of the general manager if the general manager fails to disclose any potential violations of Section 7201.072 as required by that section.

Added by Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 4, eff. September 1, 2019.

SUBCHAPTER C. POWERS AND DUTIES


Sec. 7201.101. GENERAL POWERS AND DUTIES. Except as otherwise provided by this chapter, the district has all of the rights, powers, privileges, authority, functions, and duties provided by the general law of this state, including Chapters 49 and 65, Water Code, applicable to districts created under Section 59, Article XVI, Texas Constitution.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Sec. 7201.102. PROVISION OF SERVICE. The district shall at all times operate and construct necessary improvements within the certificated areas established by the Public Utility Commission of Texas or the Texas Commission on Environmental Quality to provide uninterrupted, continuous, and adequate service to existing and future customers for water, sewer, and contract services.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 2.90, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 171 (S.B. 567), Sec. 90, eff. September 1, 2013.

Sec. 7201.103. INTERLOCAL CONTRACTS. In accordance with Chapter 791, Government Code, the district and the Rio Grande Regional Water Authority may enter into a contract under which the Rio Grande Regional Water Authority may provide administrative or any other contract activities for or with the district. The district may enter into interlocal cooperation contracts with any public or private entity, request any necessary regulatory approval required, and charge fees and rates adequate to generate revenue sufficient to cover all expenses of the district based on cost-of-service principles. For purposes of Chapter 791, Government Code, performance under a contract is a governmental function or service.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Sec. 7201.104. SEARCHABLE DISTRICT EXPENDITURE DATABASE. (a) The district shall establish and post on the district's Internet website a database of district check register reports, including district expenditures and contracts. The database must include the amount, date, description, payor, and payee of the expenditures, and, if applicable, parties to the contract.

(b) The district may not include in the database under Subsection (a) a district employee's salary or personal identifying information, as defined by Section 521.002, Business & Commerce Code.

(c) The district shall prominently display a link to the database established under this section on the district's Internet website. The information provided in the district check register reports must be updated monthly.

(d) The district shall keep in the database information required by this section related to an adopted budget until the third anniversary of the date the budget was adopted.

Added by Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 5, eff. September 1, 2019.

SUBCHAPTER D. OPERATING PROVISIONS


Sec. 7201.201. AUDIT OF DISTRICT. (a) Subchapter G, Chapter 49, Water Code, applies to the district.

(b) An individual licensed by the state as a certified public accountant with not less than five years of government accounting experience shall perform the audit required by Section 49.191, Water Code.

(c) Not later than the third day after the date the accountant finalizes the audit required by this section, the district shall publish the audit on the district's Internet website.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 6, eff. September 1, 2019.

Sec. 7201.202. RECORDS OF DISTRICT. The district shall comply with all rules and regulations pertaining to records preservation, retention, and destruction promulgated by the Texas State Library and Archives Commission under Chapter 441, Government Code, as made applicable to water districts and utilities.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Sec. 7201.203. MAINTAINING NECESSARY RECORDS. The district shall maintain necessary records and follow cost-of-service principles with respect to provision of retail public water or sewer service or any other service authorized by Chapter 49 or 65, Water Code, or an interlocal contract entered into in accordance with Chapter 791, Government Code.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Sec. 7201.204. NEWSLETTER, WEBSITE, AND ANNUAL FINANCIAL INFORMATION. (a) The district shall maintain and update monthly an Internet website with current information concerning policies, monthly financial information concerning revenues and expenses, and monthly summaries.

(b) Not later than 72 hours before a meeting held by the district, the district shall publish on the district's Internet website the agenda for the meeting.

(c) Not later than 72 hours after the date the district adopts the minutes of a meeting held by the district, the district shall publish on the district's Internet website the minutes adopted by the district.

(d) The district shall provide information, including summary financial information based on the preceding year's annual audit, to district customers at an annual meeting.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 702 (S.B. 2552), Sec. 7, eff. September 1, 2019.

Sec. 7201.205. DISCONNECTION OF SERVICE AND CUSTOMER FEES. (a) The district may not disconnect service of a customer for late payment before the 11th day after the date the district notifies the customer of the overdue payment.

(b) After a disconnection caused by the customer's late payment, the district may not charge a customer a fee for restoring or reinstalling service that exceeds $25 or twice the amount of the late payment owed, whichever is less.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 1263 (S.B. 1875), Sec. 2, eff. September 1, 2011.

Sec. 7201.206. RATES AND FEES FOR SERVICES. (a) The district, in connection with water or sewer retail public utility services, shall establish lifeline, senior citizen, or minimum consumption level rates for services. The rate impact of such services shall be allocated on the basis of costs of services to achieve conservation principles, while securing necessary reserves for the payment of operating expenses, sinking funds, principal, interest, and debt coverage factors, and any other objective established by the district's annual budget.

(b) Chapter 395, Local Government Code, does not apply to any fee, charge, or assessment that, before the corporation's dissolution and conversion to a district, is adopted by the receiver for the purpose of generating revenue to fund or recoup the costs of capital improvements or facility expansions necessitated by and attributable to new developments.

(c) Notwithstanding Subsection (b), beginning on December 31, 2009, the district may not impose any fee, charge, or assessment that, before the corporation's dissolution and conversion to a district, is adopted by the receiver for the purpose of generating revenue to fund or recoup the costs of capital improvements or facility expansions necessitated by and attributable to new developments unless the district readopts the fee, charge, or assessment or adopts a new fee, charge, or assessment in accordance with Chapter 395, Local Government Code. This subsection does not apply to a retail water or sewer rate adopted by the receiver or the district.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1430 (S.B. 3), Sec. 9.11, eff. June 16, 2007.

Sec. 7201.207. SERVICE CONTRACT ALLOCATION OF COST AND IMMUNITY FROM CLAIMS. (a) In connection with intergovernmental, interlocal, or wholesale service contracts, including cooperative billing for any contract-based service, the district shall allocate costs of service ratably for the service, and the district shall secure indemnity from the contracting party to the extent allowed by law.

(b) The district is a governmental unit, as that term is defined by Section 101.001(3), Civil Practice and Remedies Code, and, to the fullest extent provided by law, enjoys immunity from suit and liability, consistent with general law, the Texas Tort Claims Act, Chapter 101, Civil Practice and Remedies Code, and Chapter 49, Water Code, including Section 49.066 of that code.

Added by Acts 2005, 79th Leg., Ch. 1057 (H.B. 1358), Sec. 2.01, eff. September 1, 2005.