Relating to municipal utility districts; limiting the rate of a tax.
relating to municipal utility districts; limiting the rate of a
tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 209.00591, Property Code, is amended by
adding Subsection (a-4) to read as follows:
(a-4) A person may not serve on the board of a property
owners’ association if the person serves as a director of a
municipal utility district under Chapter 54, Water Code.
SECTION 2. Subchapter B, Chapter 54, Water Code, is amended
by adding Section 54.0135 to read as follows:
Sec. 54.0135. PRE-PETITION NOTICE TO CERTAIN COUNTIES. (a)
This section applies only to a proposed district described by
Section 54.0161(a).
(b) At least 30 days before a petition requesting creation
of a proposed district is filed with the commission under Section
54.014, notice must be sent by certified mail to the commissioners
court of each county in which the proposed district is to be
located. The notice must:
(1) be sent to the address of the main county mailbox,
and the address of each county commissioner and county judge;
(2) generally describe the boundaries of the land to
be included in the proposed district, including identifying
landmarks such as adjacent streets or geographic features such as
rivers or lakes, and if possible, by metes and bounds or by lot and
block number if there is a recorded map or plat and survey of the
area to be included in the district; and
(3) inform the commissioners court of the right to:
(A) respond to the notice provided under this
section;
(B) review the petition requesting creation of
the proposed district; and
(C) submit a written opinion on the creation of
the proposed district under Section 54.0161.
(c) Notice under this section must be sent by certified mail
at least 30 days before the date a petition requesting creation of
the proposed district is filed with the commission under Section
54.014.
SECTION 3. Section 54.015, Water Code, is amended to read as
follows:
Sec. 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; and
(4) for a district described by Section 54.0161(a),
include a copy of the notice described by Section 54.0135.
SECTION 4. Section 54.0161, Water Code, is amended by
amending Subsection (a) to read as follows:
(a) This section applies [only] to a proposed district:
(1) partly or wholly [all of which is to be] located
outside the corporate limits of a municipality, including proposed
districts which overlap more than one county; or
(2) partly or wholly located inside the
extraterritorial jurisdiction of a municipality.
SECTION 5. Section 54.022, Water Code, is amended by adding
Subsection (d) to read as follows:
(d) Notwithstanding any other subsection, the district
shall immediately schedule an election to elect permanent directors
once 75 percent of the plots under the district’s jurisdiction are
leased sold, or conveyed in some manner.
SECTION 6. Chapter 54, Water Code, is amended by adding
Subsection 54.037 to read as follows:
Sec. 54.037. REVIEW OF CREATION BY A GROUNDWATER
CONSERVATION DISTRICT. (a) This section applies to a proposed
district, located in or within five miles of the jurisdiction of a
groundwater conservation district, as that term is defined by
Chapter 36.
(a-1) At least 30 days before a petition requesting creation
of a proposed district is filed with the commission under Section
54.014, notice must be sent by certified mail to the groundwater
conservation district in which the proposed district is to be
located or in proximity to, The notice must:
(1) be sent to the mailing address of the groundwater
conservation district;
(2) generally describe the boundaries of the land to
be included in the proposed district, including identifying
landmarks such as adjacent streets or geographic features such as
rivers or lakes, and if possible, by metes and bounds or by lot and
block number if there is a recorded map or plat and survey of the
area to be included in the district; and
(3) inform the groundwater conservation district of
the right to:
(A) respond to the notice provided under this
section;
(B) review the petition requesting creation of
the proposed district; and
(C) submit a written opinion on the creation of
the proposed district under Section 54.0161.
(a-2) The groundwater conservation district in which the
district is to be located, or in proximity to, may review the
petition for creation and other evidence and information relating
to the proposed district that the groundwater conservation district
consider necessary. Petitioners for the creation of a district
shall submit to the groundwater conservation district any relevant
information requested by the groundwater conservation district.
(b) In the event the groundwater conservation district opts
to submit information to the commission or to make a recommendation
regarding the creation of the proposed district, the groundwater
conservation district shall submit to the commission, at least 10
days before the date set for action on the petition, a written
opinion stating:
(1) whether the groundwater conservation district
recommends the creation of the proposed district; and
(2) any findings, conclusions, and other information
that the groundwater conservation district thinks would assist the
commission in making a final determination on the petition.
(c) In passing on a petition subject to this section, the
commission shall consider the written opinion submitted by the
groundwater conservation district.
SECTION 7. Section 54.102, Water Code, is amended to read as
follows:
Sec. 54.102. QUALIFICATIONS FOR DIRECTORS. (a) 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.
(a-1) a minimum of three directors must be qualified voters
within the district, and reside within the district.
(b) A person is disqualified from serving as a director if
that person is serving on the board of a property owners’
association under Chapter 209, Property Code.
SECTION 8. Chapter 54, Water Code, is amended by adding Sec.
54.103 to read as follows:
LENGTH OF TERMS FOR DIRECTORS. Notwithstanding any other
Chapter, the length of a term for a director shall not exceed four
years. This Section does not impose term limits.
SECTION 9. Subchapter C, Chapter 54, Water Code, is amended
by adding Section 54.104 to read as follows:
Sec. 54.103. POSTING OF NOTICE; POSTING OF BUDGET; TIME AND
PLACE OF MEETINGS; GENERAL RULE.
(a) Notwithstanding Section 49.062, Water Code or Section
551.043, Government Code, a notice of a meeting of the district’s
board must be posted in a place readily accessible to the general
public at all times for at least three business days before the
scheduled date of the meeting, except as provided by Sections
551.044, 551.045, and 551.046, Government Code.
(b) If the board of a district conducts meetings at least
quarterly, the board shall conduct a meeting at a designated
meeting location inside the district or within 10 miles of the
boundary of the district at least once per quarter.
Notwithstanding Chapter 551, Government Code, a district to which
this section applies may satisfy the requirements of this
Subsection by conducting quarterly meetings by telephone
conference call or video conference call. A meeting to discuss the
tax rate of the district must be conducted in person.
(d) The notice of a meeting required to be posted under this
Section, Sec. 551.043(a), Government Code or Sec. 49.063, Water
Code, at which the district’s board will discuss or adopt a budget
for the district or board must include a physical copy of the
budget.
SECTION 10. Subchapter G, Chapter 54, Water Code, is
amended by adding Section 54.605 to read as follows:
Sec. 54.605 APPLICABILITY OF TAX HEARINGS; AUTOMATIC
ELECTIONS FOR CERTAIN TAXES; LIMITATIONS ON TAX RATES; GENERAL
RULE. (a) For the purposes of providing notice of a tax hearing and
automatic elections to approve tax rates under Sections 49.236,
49.23601, 49.23602, and 49.23603, and notwithstanding those
sections, a district under this section shall be considered a
developed district under Section 49.23602, regardless of whether
the district has financed, completed, and issued all bonds to pay
for all lands, works, improvements, facilities, plants, equipment,
and appliances necessary to serve at least 95 percent of the
projected build-out of the district in accordance with the purposes
for its creation or the purposes authorized by the constitution,
this code, or any other law.
(b) For the purposes of providing notice of a tax hearing
under Section 49.236, notices shall also apply and include
reference to the district’s interest and sinking fund rate.
(c) For the purposes of an automatic election to approve tax
rates under Section 49.23602, the district shall also account for
its interest and sinking fund rate under Sec. 49.23602(a)(4) and
Sec. 49.23602(c).
(d) Notwithstanding any other statutes, the district shall
not assess or impose an interest and sinking fund rate in any tax
year that exceeds a rate of 50 cents on the $100 of assessed value.
(e) Notwithstanding any other statutes, no district shall
levy an ad valorem tax rate in excess of One Dollar and Twenty Five
Cents ($1.25) on the $100 of assessed valuation in any one tax year
for combined district taxes.
SECTION 11. Sections 209.00591(a-4), Property Code, and
54.102(b), as added by this Act, apply only to a person elected or
appointed to serve as the presiding officer of the board of a
property owners ‘ association or president of the board of a
municipal utility district on or after the effective date of this
Act.
SECTION 12. Section 54.0135, Water Code, as added by this
Act, and Section 54.015, Water Code, as amended by this Act, apply
only to a petition requesting creation of a municipal utility
district that is filed with the Texas Commission on Environmental
Quality on or after the effective date of this Act. A petition
requesting creation of a municipal utility district that was filed
with the commission before the effective date of this Act is
governed by the law in effect on the date the petition was filed,
and the former law is continued in effect for that purpose.
SECTION 13. Section 54.102, Water Code, as amended by this
Act, does not affect the entitlement of a member serving
immediately before the effective date of this Act on the board of
directors of a municipal utility district described by that section
to continue to carry out the board’s functions for the remainder of
the member’s term. That section applies only to a member of the
board of directors of such a district elected or appointed on or
after the effective date of this Act. That section does not
prohibit a person who is a member of the board of directors of such a
district on the effective date of this Act from being reelected or
reappointed to the board if the person has the qualifications
required for a member under that section.
SECTION 14. This Act takes effect September 1, 2025.
