Taxing Units Must Post Bond To Challenge A New District

The text as introduced · 650 words

By: Bell of Montgomery
H.B. No. 5172

A BILL TO BE ENTITLED

AN ACT

relating to the creation of a district.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 49.011, Water Code is amended to read as

follows:

Sec. 49.011. NOTICE APPLICABLE TO CREATION OF A DISTRICT OR

ADDITION OF LANDS TO A DISTRICT BY THE COMMISSION. (a) On receipt

by the commission of all required documentation associated with an

application for creation of a district by the commission under

Chapter 36, 50, 51, 54, 55, 58, 65, or 66 of this code or Chapter

375, Local Government Code or addition of lands to a district by the

commission under Section 54.016 of this code or Section 42.042,

Local Government Code the commission shall issue a notice

indicating that the application is administratively complete.

(b) The commission by rule shall establish a procedure for

public notice and hearing of applications. The rules must require

an applicant to publish the notice issued by the commission under

Subsection (a) once a week for two consecutive weeks in a newspaper

regularly published or circulated in the county where the district

or added land is proposed to be located not later than the 30th day

before the date on which the commission may act on the application.

The commission shall provide the notice to each state

representative and state senator who represents an area inside the

proposed district's boundaries or boundaries of land to be added to

the district under Section 54.016 of this code or Section 42.042,

Local Government Code.

(c) The commission may act on an application without holding

a public hearing if a public hearing is not requested by the

commission, the executive director, or an affected person in the

manner prescribed by commission rule during the 30 days following

the final publication of notice under Subsection (b).

(d) If the commission determines that a public hearing is

necessary, the commission shall advise all parties of the time and

place of the hearing. The commission is not required to provide

public notice of a hearing under this section.

(e) The commission shall require any affected person that is

a taxing unit or other provider of water or wastewater services that

requests a hearing on a petition under this section to post a bond

issued by a surety company qualified to do business in this state or

other adequate security in the pro rata amount of the estimated

legal, engineering, and related costs that may be incurred by the

applicant for the hearing proceeding. The amount of the bond or

other security shall be determined by the commission at the time a

hearing is granted. If the petition is denied by the commission

after a hearing, then the commission shall order the applicant to

reimburse the legal, engineering and other related costs and

expenses related to hearing incurred by any affected person that is

a taxing unit or other provider of water or wastewater services. If

the petition is approved by the commission after a hearing, then the

commission shall order each affected person that is a taxing unit or

other provider of water or wastewater services to reimburse its pro

rata share of the applicant's legal, engineering and related costs

and expenses related to the hearing.

( f ) A copy of the order of the commission granting or

denying a petition for the creation of a district 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.

SECTION 2. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.