(a) Territory may be annexed to the authority as provided by this section.
(b) The board may annex territory or a municipality under this section only if a petition requesting annexation is signed by 50 registered voters of the territory or municipality to be annexed, or a majority of the registered voters of that territory or municipality, whichever is fewer, and is filed with the board. The petition must describe the territory to be annexed by metes and bounds, or otherwise, except that if the territory is the same as that contained in the boundaries of a municipality, the petition is sufficient if it states that the territory to be annexed is the territory contained in the municipal boundaries.

(c) If the board determines that the petition complies with Subsection (b), that the annexation would be in the best interest of the territory or municipality and the authority, and that the authority will be able to supply water or have water supplied to the territory or municipality, the board shall:
(1) adopt a resolution stating the conditions, if any, under which the territory or municipality may be annexed to the authority; and
(2) set a time and place to hold a hearing on the question of whether the territory or municipality to be annexed will benefit from:
(A) the improvements, works, or facilities owned or operated or contemplated to be owned or operated by the authority; or
(B) the other functions of the authority.
(d) At least 10 days before the date of the hearing, notice of the adoption of the resolution stating the time and place of the hearing must be published one time in a newspaper of general circulation in the territory or municipality proposed to be annexed. The notice must describe the territory in the same manner in which Subsection (b) requires the petition to describe the territory.
(e) Any interested person may appear at the hearing and offer evidence for or against the annexation.
(f) The hearing may proceed in the order and under the rules prescribed by the board and may be recessed from time to time.
(g) If, at the conclusion of the hearing, the board finds that the property in the territory or municipality will benefit from the present or contemplated improvements, works, or facilities, the board shall adopt a resolution making a finding of the benefit and calling an election in the territory or municipality to be annexed.
(h) The resolution must state:
(1) the date of the election;
(2) each place where the election will be held; and
(3) the proposition to be voted on.
(i) At least 10 days before the date set for the election, notice of the election must be given by publishing a substantial copy of the resolution calling the election one time in a newspaper of general circulation in the territory or municipality proposed to be annexed.
(j) If a majority of the votes cast at the election are in favor of annexation, the board by resolution shall annex the territory or municipality to the authority.
(k) An annexation under this section is incontestable except in the manner and within the time for contesting elections under the Election Code.
(l) The board is not required to call an election if:
(1) a petition requesting annexation is signed by all residents and landowners of the territory or municipality to be annexed, the same as provided by law for conveyance of real property; and
(2) the petition:
(A) states that the petitioners:
(i) approve their share of the outstanding bonds or other obligations and the unissued bonds, if any, of the authority; and
(ii) authorize the board to set rates sufficient to pay their share of the debt and impose taxes sufficient to pay those bonds, if authorized; and
(B) is filed in the office of the county clerk of each county in which the authority is located.