CHAPTER 7201. AGUA SPECIAL UTILITY DISTRICT - Texas Statutes

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, Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1430, 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, Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1430, 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, 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 Texas Commission on

Environmental Quality.

Added by Acts 2005, 79th Leg., Ch.

1057, Sec. 2.01, eff. September 1, 2005.

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 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, Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1430, Sec. 9.04, eff. June 16, 2007.

SUBCHAPTER A1. TEMPORARY PROVISIONS

For expiration of this subchapter, see Sec. 7201.022

Sec. 7201.021. TRANSFER OF ASSETS; DISSOLUTION. (a) Except as

provided by this subsection, after the appointment of initial

directors under Section 7201.051, the receiver for the

corporation shall transfer the assets, debts, and contractual

rights and obligations of the corporation, including all legal

claims against the corporation in effect on the date of the

transfer, to the district and provide notices and make recordings

of the transfer required by the Water Code and general law. If

the transfer of any debt requires the permission of the lender,

the receiver shall initiate proceedings to obtain that

permission.

(b) In accordance with the orders of the receivership court and

not later than the 30th day after the date of the transfer under

Subsection (a), the receiver for the corporation shall commence

dissolution proceedings of the corporation.

(c) On dissolution of the corporation, Certificates of

Convenience and Necessity Nos. 10559 and 20785 are considered to

be held by the district.

(d) The receiver for the corporation shall notify the Texas

Commission on Environmental Quality of the dissolution of the

corporation and its succession in interest by the district in

order to effect the transfer of Certificates of Convenience and

Necessity Nos. 10559 and 20785 to the district.

(e) On receipt of notice under Subsection (d), the Texas

Commission on Environmental Quality shall note in its records

that Certificates of Convenience and Necessity Nos. 10559 and

20785 are held by the district. The Texas Commission on

Environmental Quality shall, as a ministerial act, transfer the

certificates to the district without further application, notice,

or hearing. A person, party, or entity does not have any right

of protest, objection, or administrative review of the transfer

prescribed by this section.

(f) After the Texas Commission on Environmental Quality takes

the action required by Subsection (e), the court shall terminate

the receivership.

Added by Acts 2005, 79th Leg., Ch.

1057, Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1430, Sec. 9.05, eff. June 16, 2007.

Sec. 7201.022. EXPIRATION OF SUBCHAPTER. This subchapter

expires September 1, 2012.

Added by Acts 2005, 79th Leg., Ch.

1057, Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1430, Sec. 9.06, eff. June 16, 2007.

SUBCHAPTER B. BOARD OF DIRECTORS

Sec. 7201.051. APPOINTMENT OF INITIAL DIRECTORS. (a) As soon

as practicable after the effective date of the Act enacted by the

80th Legislature, Regular Session, 2007, amending this section,

seven initial directors shall be appointed as provided by this

section.

(b) To be eligible to be appointed as an initial director, an

individual must meet the same requirements as a candidate for an

elected position as director under Section 7201.052. The initial

directors shall be appointed as follows:

(1) one director to represent the residents of the district in

the City of Mission appointed by the governing body of that city;

(2) one director to represent the residents of the district in

the City of Palmview appointed by the governing body of that

city;

(3) one director to represent the residents of the district in

the City of Penitas appointed by the governing body of that city;

(4) one director to represent the residents of the district in

the City of Sullivan City appointed by the governing body of that

city; and

(5) three directors to represent the residents of the district

outside the municipalities listed in Subdivisions (1)-(4)

appointed by the Hidalgo County Commissioners Court.

(c) An initial director serves a term that expires on June 1 of

the year in which the director's successor is elected under

Section 7201.052.

Added by Acts 2005, 79th Leg., Ch.

1057, Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1430, Sec. 9.07, eff. June 16, 2007.

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, Sec. 9.08, eff. June 16, 2007.

Sec. 7201.0513. EDUCATION PROGRAM. (a) Before the first

election of directors under Section 7201.052, 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, Sec. 9.08, eff. June 16, 2007.

Sec. 7201.052. BOARD OF DIRECTORS. (a) Except as provided by

Subsection (l), the district shall be governed by a board of

seven directors, elected as follows:

(1) one director elected by the voters of the part of the City

of Mission inside the district to represent that part of the

city;

(2) one director elected by the voters of the City of Palmview

to represent that city;

(3) one director elected by the voters of the City of Penitas to

represent that city;

(4) one director elected by the voters of the City of Sullivan

City to represent that city; and

(5) three directors elected at-large to numbered positions on

the board by the district voters who do not reside in any of the

municipalities listed in Subdivisions (1)-(4) to represent the

part of the district that is not included in those

municipalities, unless the number of at-large directors is

increased under Subsection (l).

(b) A candidate for one of the numbered director positions:

(1) must reside in the part of the service area of the district

that is not included in any of the municipalities listed in

Subsections (a)(1)-(4); and

(2) must be eligible to hold office under Section 141.001,

Election Code.

(c) A candidate for one of the director positions representing a

municipality listed in Subsection (a)(1), (2), (3), or (4):

(1) must reside in the municipality the candidate seeks to

represent; and

(2) must be eligible to hold office under Section 141.001,

Election Code.

(d) It is the policy of the district that the directors shall

represent and reside in as broad a cross-section of the

geographic area of the district as possible.

(e) The district shall fill a vacancy on the board in accordance

with Section 49.105, Water Code.

(f) Except for the initial directors appointed under Section

7201.051 or elected at the first election under Subsection (g),

directors serve staggered terms of four years.

(g) On the uniform election date in May 2008, or in May 2010, if

the election is postponed under Subsection (h), the district

shall hold an election to elect seven directors. On the uniform

election date in May of each even-numbered year after that date,

the district shall hold an election to elect the appropriate

number of directors.

(h) The initial board by order may postpone until the uniform

election date in May 2010 the first election for directors under

Subsection (g) if the initial board determines that there is not

sufficient time to comply with the requirements of law and to

order the election of directors to be held on the first uniform

election date specified by that subsection.

(i) The directors elected at the first election under Subsection

(g) shall cast lots to determine which three directors shall

serve terms expiring June 1 of the first even-numbered year after

the year in which the directors are elected and which four

directors shall serve terms expiring June 1 of the second

even-numbered year after the year in which the directors are

elected.

(j) A director may not serve consecutive terms.

(k) 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.

(l) If, before the expiration of the term of a director elected

to represent a municipality under Subsection (a)(1), (2), (3), or

(4), the district determines that all of the incorporated

territory of the municipality is outside the boundaries of the

district, the position immediately becomes an at-large numbered

position to be filled at the next general election of the

district in accordance with Subsections (a)(5) and (b).

Added by Acts 2005, 79th Leg., Ch.

1057, Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1430, Sec. 9.09, eff. June 16, 2007.

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, 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, Sec. 9.10, eff. June 16, 2007.

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, 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 commission 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, Sec. 2.01, eff. September 1, 2005.

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, Sec. 2.01, eff. September 1, 2005.

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.

Added by Acts 2005, 79th Leg., Ch.

1057, Sec. 2.01, eff. September 1, 2005.

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, 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, Sec. 2.01, eff. September 1, 2005.

Sec. 7201.204. NEWSLETTER, WEBSITE, AND ANNUAL FINANCIAL

INFORMATION. The district shall maintain an Internet website

with current information concerning agendas, minutes, policies,

monthly financial information concerning revenues and expenses,

and quarterly summaries. 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, Sec. 2.01, eff. September 1, 2005.

Sec. 7201.205. DISCONNECTION OF SERVICE AND CUSTOMER FEES. (a)

The district may not disconnect service of a customer for late

payment before the 31st 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, Sec. 2.01, eff. September 1, 2005.

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, Sec. 2.01, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1430, 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, Sec. 2.01, eff. September 1, 2005.