HB 5524

relating to creation of the Palangana Energy District; granting a
limited power of eminent domain; providing authority to issue
bonds; providing authority to impose assessments, fees, and taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subtitle X, Special District Local Laws Code, is
amended by adding Chapter 11012 to read as follows:
CHAPTER 11012.  THE PALANGANA ENERGY DISTRICT
SUBCHAPTER A.  GENERAL PROVISIONS
Sec. 11012.001.  DEFINITIONS.  In this chapter:
(1)  "Board" means the board of directors of the
(2)  "Bond" means bond or note.
(3)  "District" means the Palangana Energy District.
(4)  "Director" means a member of the board.
Sec. 11012.002.  APPLICABILITY.  (a)  This chapter only
applies to a county with a population of more than 8,000 but less
(1)  has the longest state highway passing through it;
(2)  is located within 50 miles of the Texas-Mexico
Sec. 11012.003.  FINDINGS OF PUBLIC PURPOSE AND BENEFIT.
(a)  The district is created to serve a public use and benefit.
(b)  The creation of the district is necessary to accomplish
essential public functions under the constitution of this state
that enhance energy security, reliability, and resiliency in an
environmentally responsible manner; to promote and diversify
economic development and commerce; and to conserve, secure, and
develop the natural energy resources of this state for the benefit
of the South Texas region and this state.
SUBCHAPTER B.  BOARD OF DIRECTORS
Sec. 11012.005.  DIRECTORS.  (a)  The district is governed by
a board of directors consisting of at least 7 members.
(b)  The board is responsible for the management, operation,
(1)  establish the number of directors of the district;
(2)  establish that directors serve staggered
Sec. 11012.006.  ELIGIBILITY TO SERVE AS DIRECTOR.  (a)  To
be eligible to serve as a director, a person must be at least 18
(b)  To be eligible to serve as a director, a person may not:
(1)  hold another public office; and
(2)  be an officer or employee of the district.
(c)  A director is eligible for reappointment.
Sec. 11012.007.  VACANCIES.  Any vacancy occurring on the
board shall be filled for the unexpired term by appointment in the
manner in which the vacating director was appointed.
Sec. 11012.008.  REMOVAL OF DIRECTOR.  A director may be
removed from office at any time, with or without cause.
Sec. 11012.009.  OFFICERS.  At the first meeting of the board
after May 1 of each year, the board shall elect officers for the
district, including a chair, vice chair, secretary, and treasurer.
Sec. 11012.010.  MEETINGS AND ACTIONS OF BOARD; QUORUM.
(a)  The board may meet as many times each year as the board
(b)  A majority of the membership of the board constitutes a
quorum at a meeting of the board.
(c)  A concurrence of a majority of the directors present and
voting is sufficient for transacting any business of the district
unless other applicable law, or the district by rule, requires a
concurrence of a greater number of directors for a specific type of
SUBCHAPTER C.  POWERS AND DUTIES
Sec. 11012.011.  GENERAL POWERS AND DUTIES.  The district
has the powers and duties necessary to accomplish the purposes for
which the district is created.  The district may:
(1)  acquire, purchase, own, hold, lease, construct,
operate, repair, improve, maintain, or extend a groundwater well or
other source of water supply, water and wastewater works, drainage,
road improvements, salt cavern storage facilities, facilities that
generate electricity, and any type of transmission line or
(3)  finance any purchase or acquisition through a
bond, note, or other obligation or through a lease-purchase
(4)  sell, lease, convey, or otherwise dispose of any
right, interest, or property the district considers to be
unnecessary for the efficient operation or maintenance of the
Sec. 11012.012.  EMINENT DOMAIN.  (a)  The district may
exercise the power of eminent domain to acquire a fee simple or
other interest in property if the interest is necessary for the
district to exercise the rights or authority conferred by this
(b)  The district must exercise the power of eminent domain
in the manner provided by Chapter 21, Property Code.
Sec. 11012.013.  CONTRACTS.  The district may contract with
any person to carry out a power authorized by this chapter.
Sec. 11012.014.  COOPERATIVE CONTRACTS.  The district may
enter into an interlocal contract with a local government under
Chapter 791, Government Code, to carry out a power of the district.
SUBCHAPTER D.  GENERAL FINANCIAL PROVISIONS
Sec. 11012.015.  GIFTS, GRANTS, LOANS, AND OTHER FUNDS.  The
district may apply for, accept, receive, and administer gifts,
grants, loans, and other funds available from any source.
Sec. 11012.016.  AUTHORITY TO ISSUE BONDS, NOTES, AND OTHER
OBLIGATIONS.  The district may issue bonds, notes, or other
obligations payable wholly or partly from ad valorem taxes, impact
fees, revenue, contract payments, grants, sales and use taxes,
other district money, or any combination of those sources to pay for
any authorized district purpose.
Sec. 11012.017.  TAXES FOR BONDS.  At the time the district
issues bonds payable wholly or partly from ad valorem taxes, the
board shall provide for the annual imposition of continuing a
direct ad valorem tac, without limit to rate or amount, while all or
part of the bonds are outstanding as required and in the manner
provided by Chapter 49 of the Water Code.
Sec. 11012.018.  BONDS, NOTES, AND OTHER OBLIGATIONS EXEMPT
FROM TAXATION.  A bond, note, or other obligation issued under this
chapter, a transaction related to the bond, note, or other
obligation, the interest on the bond, note, or other obligation,
and the profit from the sale of the bond, note, or other obligation
are exempt from taxation by this state or a political subdivision of
Sec. 11012.019.  PETITION REQUIRED FOR FINANCING SERVICES
AND IMPROVEMENTS WITH ASSESSMENTS.  (a)  The board may not finance a
service or improvement project with assessments under this chapter
unless a written petition requesting that service or improvement
(b)  A petition filed under Subsection (a) must be signed by
the owners of a majority of the assessed value of real property in
the district subject to assessment according to the most recent
certified tax appraisal roll for the county.
Sec. 11012.020.  ASSESSMENTS; LIENS FOR ASSESSMENTS.  (a)
The board by resolution may impose and collect an assessment for any
purpose authorized by this chapter in all or any part of the
(b)  An assessment, a reassessment, or an assessment
resulting from an addition to or correction of the assessment roll
by the district, penalties and interest on an assessment or
reassessment, an expense of collection, and reasonable attorney's
(1)  are a first and prior lien against the property
(2)  are superior to any other lien or claim other than
a lien or claim for county, school district, or municipal ad valorem
(3)  are the personal liability of and a charge against
the owners of the property even if the owners are not named in the
(c)  The lien is effective from the date of the board's
resolution imposing the assessment until the date the assessment is
paid.  The board may enforce the lien in the same manner that the
board may enforce an ad valorem tax lien against real property.
(d)  The board may make a correction to or deletion from the
assessment roll that does not increase the amount of assessment of
any parcel of land without providing notice and holding a hearing in
the manner required for additional assessments.
Sec. 11012.021.  TAX ELECTION REQUIRED.  The district must
hold an election in the manner provided by Chapter 49, Water Code,
to obtain voter approval before the district may impose an ad
Sec. 11012.022.  OPERATION AND MAINTENANCE TAX.  (a)  If
authorized by a majority of the district voters voting at an
election, the district may impose an operation and maintenance tax
on taxable property in the district in the manner provided by
Section 49.107, Water Code, for any district purpose, including to:
(1)  maintain and operate the district;
(2)  construct or acquire improvements; or
(b)  The board shall determine the operation and maintenance
tax rate.  The rate may not exceed the rate approved at the
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.