(a) The board of a district that has a total area of more than 10,000 acres shall call a hearing on the exclusion of land from the district on or before the 60th day after receiving a written petition filed with the secretary of the board by one or more owners of land more than half the acreage of which has been for more than 20 years included in and taxable by the district if any bonds issued by the district payable in whole or in part from taxes of the district are outstanding and the petition:
(1) is signed by the owners of a majority of the acreage proposed to be excluded, as reflected by the most recent certified tax roll of the district;
(2) includes a claim that the district does not provide the land with retail utility services;
(3) describes the property to be excluded; and
(4) provides facts necessary for the board to make the findings required by Subsection (b).

(a-1) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 1392, Sec. 5, eff. September 1, 2013.
(b) The board of a district shall exclude land under this section if:
(1) the district does not provide retail utility service to the land described by the petition;
(2) the district has imposed a tax on more than half the acreage of the land for at least 20 years; and
(3) all taxes the district has levied and assessed against the land and all fees and assessments the district has imposed against the land or the owner that are due and payable on or before the date of the petition are fully paid.
(c) Subject to Subsection (c-1), unless the district presents evidence at the hearing that conclusively demonstrates that the requirements and grounds for exclusion described by Subsection (a) have not been met, the board shall enter an order excluding the land from the district and shall redefine in the order the boundaries of the district to embrace all land not excluded.
(c-1) If on or before the date of the exclusion hearing required by Subsection (a) the district and the owner or owners enter into an agreement for utility service to the land proposed to be excluded, the district is not required to enter an order excluding the land from the district. An owner of all or part of the land is not required to enter into a utility agreement that as of the date of the petition:
(1) is not comparable economically or in the level of service provided to the land to the owner’s current source of utility service, as may be determined by the owner; or
(2) does not include all utility services required to serve the land.
(d) A copy of an order excluding land and redefining the boundaries of the district shall be filed in the deed records of each county in which the district is located and with the commission.
(e) The exclusion of land under this section does not impair the rights of holders of any outstanding bonds, warrants, or other certificates of indebtedness of the district.
(f) After any land is excluded under this section, the district may issue any unissued additional debt approved by the voters of the district before exclusion of the land under this section without holding a new election. Additional debt issued after land is excluded from the district may not be payable from taxes levied against and does not create a lien against the taxable value of the excluded land.
(g) This section does not apply to irrigation districts governed by Chapter 58.
(g-1) This section does not apply to a district:
(1) whose primary activity is the wholesale supply of raw water and that has fewer than 500 retail customers; or
(2) whose jurisdiction covers four counties and that was created under § 59, Article XVI, Texas Constitution.
(h) For purposes of this section and § 49.3077, “land” includes any improvements to the land, and when used in the context of property taxes, “land” has the meaning assigned to “real property” by § 1.04, Tax Code.