S.B. No. 2552

	AN ACT
	relating to the administration of the Agua Special Utility
	District; creating a criminal offense.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 7201.0513(a), Special District Local
	Laws Code, is amended to read as follows:
	(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.
	SECTION 2.  Subchapter B, Chapter 7201, Special District
	Local Laws Code, is amended by adding Section 7201.055 to read as
	follows:
	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.
	SECTION 3.  Subchapter B, Chapter 7201, Special District
	Local Laws Code, is amended by adding Sections 7201.056, 7201.057,
	and 7201.058 to read as follows:
	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.
	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.
	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.
	SECTION 4.  Chapter 7201, Special District Local Laws Code,
	is amended by adding Subchapter B-1 to read as follows:
	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.
	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.
	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.
	SECTION 5.  Subchapter C, Chapter 7201, Special District
	Local Laws Code, is amended by adding Section 7201.104 to read as
	follows:
	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.
	SECTION 6.  Section 7201.201, Special District Local Laws
	Code, is amended by adding Subsection (c) to read as follows:
	(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.
	SECTION 7.  Section 7201.204, Special District Local Laws
	Code, is amended to read as follows:
	Sec. 7201.204.  NEWSLETTER, WEBSITE, AND ANNUAL FINANCIAL
	INFORMATION. (a)  The district shall maintain and update monthly
	an Internet website with current information concerning [agendas,
	minutes,] policies, monthly financial information concerning
	revenues and expenses, and monthly [quarterly] 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.
	SECTION 8.  Effective December 31, 2019, Sections 7201.051
	and 7201.052, Special District Local Laws Code, are repealed.
	SECTION 9.  (a)  Not later than December 31, 2019, the board
	of directors of the Agua Special Utility District shall determine
	each subdistrict in accordance with Section 7201.055, Special
	District Local Laws Code, as added by this Act, and in compliance
	with all applicable provisions of the Election Code.
	(b)  The initial election for positions 1, 2, and 3 on the
	board shall be held on the uniform election date in May 2020. The
	initial election for positions 4 through 7 shall be held on the
	uniform election date in May 2022.
	SECTION 10.  Not later than January 1, 2020:
	(1)  a member of the board of directors of the Agua
	Special Utility District shall file a financial statement as
	required by Section 7201.056, Special District Local Laws Code, as
	added by this Act; and
	(2)  the Agua Special Utility District shall establish
	and post on the district's Internet website a database of district
	check register reports as required by Section 7201.104, Special
	District Local Laws Code, as added by this Act.
	SECTION 11.  (a)  The changes in law made by this Act do not
	affect the entitlement of a member serving on the board of directors
	of the Agua Special Utility District immediately before the
	effective date of this Act to continue to serve as a member of the
	board for the remainder of the member's term.
	(b)  A member described by Subsection (a) of this section may
	not serve more than two consecutive terms on the board even though
	one or more of those terms began before the effective date of this
	Act.
	SECTION 12.  The changes in law made by this Act apply only
	to a general manager employed or whose employment contract is
	renewed or extended by the Agua Special Utility District on or after
	the effective date of this Act. A general manager employed or whose
	employment contract is renewed or extended before the effective
	date of this Act is governed by the law in effect on the date the
	general manager was employed, and the former law is continued in
	effect for that purpose.
	SECTION 13.  (a)  The legal notice of the intention to
	introduce this Act, setting forth the general substance of this
	Act, has been published as provided by law, and the notice and a
	copy of this Act have been furnished to all persons, agencies,
	officials, or entities to which they are required to be furnished
	under Section 59, Article XVI, Texas Constitution, and Chapter 313,
	Government Code.
	(b)  The governor, one of the required recipients, has
	submitted the notice and Act to the Texas Commission on
	Environmental Quality.
	(c)  The Texas Commission on Environmental Quality has filed
	its recommendations relating to this Act with the governor, the
	lieutenant governor, and the speaker of the house of
	representatives within the required time.
	(d)  All requirements of the constitution and laws of this
	state and the rules and procedures of the legislature with respect
	to the notice, introduction, and passage of this Act are fulfilled
	and accomplished.
	SECTION 14.  (a)  Section 2 of this Act takes effect
	December 31, 2019.
	(b)  Except as provided by Subsection (a) of this section,
	this Act takes effect September 1, 2019.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 2552 passed the Senate on
	May 8, 2019, by the following vote: Yeas 31, Nays 0; and that the
	Senate concurred in House amendment on May 25, 2019, by the
	following vote: Yeas 28, Nays 2.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 2552 passed the House, with
	amendment, on May 22, 2019, by the following vote: Yeas 127,
	Nays 17, two present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor