(a) The powers and duties of all districts and authorities created under Article III, Section 52 and Article XVI, Section 59 of the Texas Constitution are subject to the continuing right of supervision of the State of Texas by and through the commission or its successor, and this supervision may include but is not limited to the authority to:
(1) inquire into the qualifications of the officers and directors of any district or authority;
(2) require, on its own motion or on complaint by any person, audits or other financial information, inspections, evaluations, and engineering reports;
(3) issue subpoenas for witnesses to carry out its authority under this subsection;
(4) institute investigations and hearings using examiners appointed by the commission;
(5) issue rules necessary to supervise the districts and authorities, except that such rules shall not apply to water quality ordinances adopted by any river authority which meet or exceed minimum requirements established by the commission;
(6) issue a permit under Chapter 361, Health and Safety Code, notwithstanding a district’s rule or objection; and
(7) the right of supervision granted herein shall not apply to matters relating to electric utility operations.
(b) The commission shall prepare and submit to the governor, lieutenant governor, and speaker of the house a report of any findings made under this section.