Appointment of Receiver

Sec. 7201.302. APPOINTMENT OF RECEIVER. (a) At the request of the commission, the attorney general shall bring an action for the appointment of a receiver to collect the assets and carry on the business of the district if the district: (1) received three consecutive audit reports with anything other than an unqualified or clean opinion; (2) completed five consecutive fiscal years at a net loss; (3) has defaulted on more than one financial debt obligation; (4) has a director or agent who has been convicted of or has pleaded guilty or nolo contendere to a civil or criminal offense related to the management or governance of the district; or (5) violates a final judgment issued by a district court in an action brought by the attorney general under: (A) this chapter; (B) Chapter 7, 13, 49, or 65, Water Code; (C) Chapter 341, Health and Safety Code; (D) laws governing the selection, monitoring, or review and evaluation of professional services, vendors, or contractors for construction or improvement projects; or (E) a rule adopted or order issued under any statute listed in this subdivision. (b) The court shall appoint a receiver if an appointment is necessary to: (1) guarantee the collection of assessments, fees, penalties, or interest; (2) guarantee continuous and adequate service to the customers of the district; or (3) prevent continued or repeated violations of a court order or final commission order. Added by Acts 2023, 88th Leg., R.S., Ch. 1088 (S.B. 1188), Sec. 5, eff. September 1, 2023.