LIMITATION OF CERTAIN POWERS.

(a) Before June 20, 2009, the district:

(1) shall limit the exercise of its powers related to the provision of public water utility service to territory that is located within the boundaries of the district or as authorized by Certificate of Convenience and Necessity No. 10081; and

(2) may not provide wastewater service, solid waste service, firefighting service, or stormwater, flood control, and drainage services and may not convert to or otherwise become a municipal utility district, absent the express written consent of any municipality with extraterritorial jurisdiction that overlaps the district's boundaries.

(b) On or after June 20, 2009, to exercise a power restricted by this section, the district must file an application with the Texas Commission on Environmental Quality, if allowed by the law in existence at that time, to exercise that additional power. In addition to filing an application seeking expansion of the district's powers, the district must apply for a sewer certificate of convenience and necessity for the district to provide retail wastewater service. The district shall provide notice and a copy of an application for expansion of powers to each municipality whose jurisdiction, including extraterritorial jurisdiction, overlaps the district's boundaries, in addition to complying with any other applicable notice requirements.

(c) If a municipality that is entitled to the notice required by Subsection (b) files a request for a contested case hearing within 60 days after receipt of the notice, the Texas Commission on Environmental Quality shall directly refer the application to the State Office of Administrative Hearings for a contested case hearing.