TLC: Special District Local Laws Code Proposed Chapters

80C98(2) JJT

CHAPTER 9009. ALICE WATER AUTHORITY

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

Sec. 9009.001. DEFINITIONS. In this chapter:

(1) "Authority" means the Alice Water Authority.

(2) "Board" means the board of directors of the authority.

(3) "City" means the City of Alice.

(4) "Corpus Christi" means the City of Corpus Christi.

(5) "Director" means a member of the board.

(6) "Nueces district" means the Lower Nueces Water Supply District. (V.A.C.S. Art. 8280-270, Secs. 1 (part), 3(a) (part), 6 (part); New.)

Source Law

Sec. 1. … a … district to be known as "Alice Water Authority," (hereinafter called "Authority") … .

Sec. 3. (a) … a Board of Directors (hereinafter called the "Board")… . the City of Alice (hereinafter called the "City") … .

Sec. 6. … the City of Corpus Christi, Texas (hereinafter referred to as "Corpus Christi"), … Lower Nueces Water Supply District (hereinafter called "Nueces"), … .

Revisor's Note

The definition of "director" is added to the revised law for drafting convenience and to eliminate frequent, unnecessary repetition of the substance of the definition.

Revised Law

Sec. 9009.002. NATURE OF AUTHORITY. (a) The authority is a conservation and reclamation district created under Section 59, Article XVI, Texas Constitution.

(b) The authority is an agency of this state. (V.A.C.S. Art. 8280-270, Sec. 1 (part).)

Source Law

Art. 8280-270

Sec. 1. By virtue of Article XVI, Section 59 of the Texas Constitution, there is hereby created a conservation and reclamation district … which shall be a governmental agency, an agency of the State of Texas, and a body politic and corporate.

Revisor's Note

Section 1, V.A.C.S. Article 8280-270, provides that the Alice Water Authority is "a governmental agency … and a body politic and corporate." The revised law omits the references to "governmental agency" and "body politic and corporate" because they duplicate a part of Section 59(b), Article XVI, Texas Constitution, which provides that a conservation and reclamation district is a governmental agency and a body politic and corporate.

Revised Law

Sec. 9009.003. FINDINGS OF BENEFIT AND PUBLIC PURPOSE. (a) All territory and taxable property in the authority will benefit from the works and improvements of the authority.

(b) The accomplishment of the purposes stated in this chapter, including the use, for municipal and industrial purposes, of stored water that otherwise would be wasted into the Gulf, is for the benefit of the people of this state and for the improvement of their property and industries.

(c) In carrying out the purposes of this chapter, the authority will be performing an essential public function under the constitution. (V.A.C.S. Art. 8280-270, Secs. 2 (part), 20 (part).)

Source Law

Sec. 2. … It is hereby found and determined that all of the territory and taxable property contained within the area above described will be benefited by the works and improvements of the Authority.

Sec. 20. The accomplishment of the purposes stated in this Act, including the use, for municipal and industrial purposes, of stored water which otherwise would be wasted into the Gulf, is for the benefit of the people of this state and for the improvement of their properties and industries, and the Authority, in carrying out the purposes of this Act will be performing an essential public function under the Constitution… .

Revised Law

Sec. 9009.004. CONSTRUCTION OF CHAPTER. This chapter may not be interpreted as amending or repealing Section 11.024, Water Code, which provides for priorities for the use of water. (V.A.C.S. Art. 8280-270, Sec. 23.)

Source Law

Sec. 23. Nothing in this Act shall be interpreted as amending or repealing Article 7471, Revised Civil Statutes of Texas, which provides for priorities of the use of water.

Revisor's Note

Section 23, V.A.C.S. Article 8280-270, refers to Article 7471, Revised Statutes. Article 7471 was codified as Section 5.024, Water Code, by Chapter 58, Acts of the 62nd Legislature, Regular Session, 1971, and renumbered as Section 11.024, Water Code, by Chapter 870, Acts of the 65th Legislature, Regular Session, 1977. The revised law is drafted accordingly.

[Sections 9009.005-9009.050 reserved for expansion]

SUBCHAPTER B. AUTHORITY TERRITORY AND ANNEXATIONS TO AUTHORITY TERRITORY

Revised Law

Sec. 9009.051. AUTHORITY TERRITORY. The authority is composed of the territory that was contained in the city on January 1, 1981, as that territory may have been modified under:

(1) Subchapter J, Chapter 49, Water Code;

(2) Section 5, Chapter 12, Acts of the 57th Legislature, 3rd Called Session, 1962 (Article 8280-270, Vernon's Texas Civil Statutes);

(3) Section 9009.052; or

(4) other law. (V.A.C.S. Art. 8280-270, Sec. 2 (part); New.)

Source Law

Sec. 2. The Authority shall be comprised of all of the territory which was contained in the City of Alice, Texas, on January 1, 1981… .

Revisor's Note

For the reader's convenience, the revised law adds references to the statutory authority to change the authority's territory under Subchapter J, Chapter 49, Water Code, applicable to the authority under Sections 49.001 and 49.002 of that chapter; under Section 5, Chapter 12, Acts of the 57th Legislature, 3rd Called Session, 1962 (Article 8280-270, Vernon's Texas Civil Statutes); and under Section 9009.052 of this chapter. The revised law also includes a reference to the general authority of the legislature to enact other law to change the authority's territory.

Revised Law

Sec. 9009.052. ANNEXATION OF CITY TERRITORY. (a) Territory annexed to the city may be annexed to the authority as provided by this section.

(b) At any time after final passage of an ordinance annexing territory to the city, the board may issue a notice of hearing on the question of annexing all or part of the territory annexed to the city.

(1) states the date and place of the hearing; and

(2) describes the area proposed to be annexed or refers to the annexation ordinance of the city.

(d) The notice must be published one time in a newspaper of general circulation in the city not later than the 10th day before the date set for the hearing.

(e) The board shall adopt a resolution annexing the territory to the authority if, after the hearing, the board finds that the territory proposed to be annexed will benefit from the water supplied or to be supplied by the authority.

(f) After the territory is annexed to the authority, the board may hold an election in the authority as enlarged to determine whether the authority as enlarged shall:

(1) assume any tax-supported bonds that are outstanding or voted but not yet sold; and

(2) impose an ad valorem tax on all taxable property in the authority as enlarged for the payment of those bonds.

(g) An election held under Subsection (f) shall be held in the same manner as an election under Section 9009.354 for the issuance of bonds payable wholly or partly from taxes. (V.A.C.S. Art. 8280-270, Sec. 5.)

Source Law

Sec. 5. Territory annexed to the City may be annexed to the Authority in the following manner:

(1) At any time after final passage of an ordinance annexing territory to the City, the Board may issue a notice of hearing on the question of annexing to the Authority said territory or any part thereof. Such notice shall be sufficient if it states the date and place of the hearing, a description of the area proposed to be annexed, but in lieu of such description the notice may make reference to the annexation ordinance of the City.

(2) The notice shall be published one (1) time in a newspaper having general circulation in the City, such publication to be at least ten (10) days before the date set for the hearing.

(3) If, pursuant to such hearing, the Board finds that the territory proposed to be annexed will be benefited by the water supply afforded or to be afforded by the Authority, the Board shall adopt a resolution annexing said territory to the Authority.

(4) After territory is added to the Authority, the Board may call an election over the entire Authority as enlarged for the purpose of determining whether the entire Authority as enlarged shall assume the tax-supported bonds then outstanding and those theretofore voted, if any, but not yet sold and whether an ad valorem tax shall be levied upon all taxable property within the Authority as enlarged for the payment thereof. Such election shall be called and held in the same manner as elections for the issuance of bonds wholly or partially supported by taxation as provided in Section 15 of this Act.

Revisor's Note

(1) Section 5, V.A.C.S. Article 8280-270, provides that after territory has been annexed, the board may "call" an election that is "called and held" in the same manner as a bond election. The revised law omits "call" and "called" because, in this context, "call" or "called" is included in the meaning of holding an election. Under Chapter 3, Election Code, all elections must be ordered (called) before they may be held.

(2) Section 5, V.A.C.S. Article 8280-270, refers to an election held to determine whether to levy an ad valorem tax. The revised law substitutes "impose" for "levy." "Impose" is the term generally used in Title 1, Tax Code, and includes the levy of an ad valorem tax.

[Sections 9009.053-9009.100 reserved for expansion]

SUBCHAPTER C. BOARD OF DIRECTORS

Revised Law

Sec. 9009.101. COMPOSITION OF BOARD; TERMS. The board consists of five directors who serve staggered two-year terms expiring January 1. (V.A.C.S. Art. 8280-270, Sec. 3(a) (part); New.)

Source Law

Sec. 3. (a) … Each member shall serve for a term of two (2) years except for the first directors appointed initially pursuant to this Act. Immediately following the effective date of this Act the governing body of the City of Alice … shall appoint five (5) members, two (2) of whom shall serve for a term through December 31 next following their appointment and three (3) shall serve through the 31st day of December of the year next following their appointment.

Revisor's Note

(1) Section 3(a), V.A.C.S. Article 8280-270, states that board members serve for a term of two years "except for the first directors appointed initially pursuant to this Act." The revised law omits the quoted language as executed.

(2) Section 3(a), V.A.C.S. Article 8280-270, provides that "[i]mmediately following the effective date of this Act," the governing body of the City of Alice shall appoint five initial directors, two of whom are to serve terms through December 31 following their appointment and three of whom are to serve terms through December 31 of the next year. The revised law omits the quoted language and references to the appointment of initial directors as executed. The revised law substitutes the phrase "expiring January 1" for the language providing that terms extend through December 31. In context, it is clear that directors serve staggered terms expiring January 1, and for clarity, the revised law so provides.

Revised Law

Sec. 9009.102. APPOINTMENT OF DIRECTORS. Each December the governing body of the city shall appoint a director to succeed each director whose term expires on the following January 1. (V.A.C.S. Art. 8280-270, Secs. 3(a) (part), (b) (part).)

Source Law

Sec. 3. (a) … [five (5) members, two (2) of whom shall serve for] a term through December 31 [next following their appointment and three (3) shall serve] through the 31st day of December [of the year next following their appointment].

(b) During December following the effective date of this Act and in December of each year thereafter the governing body of the City shall appoint directors to succeed directors whose terms are about to expire… .

Revisor's Note

(1) Section 3(a), V.A.C.S. Article 8280-270, refers to terms extending "through December 31" and "the 31st of December." Section 3(b) of that article refers to directors "whose terms are about to expire." For clarity, the revised law substitutes the phrase "whose term expires on the following January 1." In context, it is clear that a director's term expires on January 1.

(2) Section 3(b), V.A.C.S. Article 8280-270, provides for the appointment of directors "[d]uring December following the effective date of this Act." The revised law omits the quoted language as executed.

Revised Law

Sec. 9009.103. QUALIFICATIONS FOR OFFICE. (a) A director must reside in and own taxable property in the authority.

(b) A member of the city's governing body or an employee of the city may not be appointed as a director. (V.A.C.S. Art. 8280-270, Sec. 3(c) (part).)

Source Law

(c) … No person shall be appointed a director unless he resides in and owns taxable property in the Authority. No member of a governing body of the City and no employee of the City shall be appointed as director… .

Revisor's Note

Section 3(c), V.A.C.S. Article 8280-270, requires each director to take the constitutional oath of office. The revised law omits that provision because Section 1, Article XVI, Texas Constitution, requires all officers to take an oath or affirmation before assuming office. The omitted law reads:

Revised Law

Sec. 9009.104. VACANCY. If a director ceases to reside in the authority or otherwise ceases to serve as a director, the governing body of the city shall appoint a successor to fill the vacancy for the unexpired term. (V.A.C.S. Art. 8280-270, Secs. 3(b) (part), (c) (part).)

Source Law

(b) … Any vacancy shall be filled for an unexpired term by the governing body of such City.

(c) … If any director moves from the Authority or otherwise ceases to be a director, the governing body of the City shall appoint a director to succeed him, for the unexpired term.

Revised Law

Sec. 9009.105. APPOINTMENT OF SECRETARY AND TREASURER. The board shall appoint a secretary and a treasurer, who are not required to be directors. The board may combine the offices of secretary and treasurer. (V.A.C.S. Art. 8280-270, Sec. 4 (part).)

Source Law

Sec. 4. … The Board shall also appoint a secretary and a treasurer who may or may not be members of the Board, and it may combine those offices… .

Revisor's Note

Section 4, V.A.C.S. Article 8280-270, provides in part for the election of officers by the board, names the board president as chief executive officer, and states the duties of the board vice president. The revised law omits those provisions because they duplicate Section 49.054, Water Code. Throughout this chapter, the revised law omits provisions that duplicate provisions in Chapter 49, Water Code, because Chapter 49 applies to the authority under Sections 49.001 and 49.002 of that chapter. The omitted law reads:

Sec. 4. The Board shall elect from its number a president and a vice-president of the Authority and such other officers as in the judgment of the Board are necessary. The president shall be the chief executive officer of the Authority and the presiding officer of the Board and … . The vice-president shall perform all duties and exercise all powers imposed or conferred by this Act upon the president when the president is absent or fails or declines to act, … .

Revised Law

Sec. 9009.106. VOTE BY BOARD PRESIDENT. The president has the same right to vote as any other director. The vice president may not exercise the president's right to vote. (V.A.C.S. Art. 8280-270, Sec. 4 (part).)

Source Law

Sec. 4. … The president … shall have the same right to vote as any other director. [The vice-president shall perform all duties and exercise all powers imposed or conferred by this Act upon the president] … except the exercise of the president's right to vote… .

Revised Law

Sec. 9009.107. DIRECTOR'S AND TREASURER'S BOND. (a) Each director shall give bond in the amount of $5,000 conditioned on the faithful performance of the director's duties.

(b) The treasurer shall give bond in the amount required by the board. The treasurer's bond shall be conditioned on the treasurer's faithful accounting for all money that comes into the treasurer's custody as treasurer of the authority. (V.A.C.S. Art. 8280-270, Secs. 3(c) (part); 4 (part).)

Source Law

[Sec. 3]

(c) … [Such directors] … each shall give bond for the faithful performance of his duties in the amount of Five Thousand Dollars ($5,000.00), … .

Sec. 4… . The treasurer shall give bond in such amount as may be required by the Board. The condition of such bond shall be that he will faithfully account for all money which shall come into his custody as treasurer of the Authority… .

Revisor's Note

Section 3(c), V.A.C.S. Article 8280-270, provides that the authority shall pay the cost of a director's bond. The revised law omits this provision because it duplicates, in substance, Section 49.055(c), Water Code. The omitted law reads:

Revised Law

Sec. 9009.108. COMPENSATION. Unless the board by resolution increases the fee to an amount authorized by Section 49.060, Water Code, each director:

(1) shall receive a fee for attending each meeting of the board not to exceed $20 for a meeting or $40 in one calendar month; and

(2) is entitled to an additional amount not to exceed $20 for each day that the director devotes to serving the business of the authority if the service is expressly approved by the board. (V.A.C.S. Art. 8280-270, Sec. 3(d) (part).)

Source Law

(d) Each director shall receive a fee of not to exceed Twenty Dollars ($20.00) for attending each meeting of the Board, provided that no more than Forty Dollars ($40.00) shall be paid to any director for meetings held in any one (1) calendar month. Each director shall also be entitled to receive not to exceed Twenty Dollars ($20.00) per day devoted to the business of the Authority and … provided that such service and [expense] are expressly approved by the Board.

Revisor's Note

(1) Section 3(d), V.A.C.S. Article 8280-270, provides in part for a $20 director's fee for attendance at a board meeting, not to exceed $40 in a month, and a $20 director's fee for each day devoted to authority business. Section 49.060, Water Code, enacted in 1995 and applicable by its own terms to the authority, authorizes higher fees. Section 49.060(e), however, provides that if the amount of the fee set by Section 49.060 would result in a fee increase, the increase does not apply to a district unless the district's board by resolution adopts a higher fee. The revised law is drafted accordingly.

(2) Section 3(d), V.A.C.S. Article 8280-270 (enacted in 1962), provides in part for reimbursement of expenses incurred in attending to authority business if expressly approved by the board. The revised law omits the provision because it is expressly superseded by Section 49.060, Water Code (enacted in 1995). The omitted law reads:

(d) … [Each director shall also be entitled] … to reimbursement for actual expenses incurred in attending to Authority's business [provided that such service and] expense [are expressly approved by the Board.]

Revised Law

Sec. 9009.109. MANAGER. The board shall employ a manager. (V.A.C.S. Art. 8280-270, Sec. 4 (part).)

Source Law

Sec. 4. … The Board shall … employ a manager… .

Revisor's Note

(End of Subchapter)

(1) Section 3(c), V.A.C.S. Article 8280-270, provides in part that a director serves until the director's successor is appointed and has qualified. The revised law omits that provision because Section 17, Article XVI, Texas Constitution, provides that an officer in this state continues to perform the officer's official duties until a successor has qualified. The omitted law reads:

(c) Each director shall serve for his term of office as herein provided and thereafter until his successor shall be appointed and qualified… .

(2) Section 3(c), V.A.C.S. Article 8280-270, states that a majority of the board members constitutes a quorum. The revised law omits that provision because it duplicates Section 49.053, Water Code. The omitted law reads:

(3) Section 4, V.A.C.S. Article 8280-270, requires the board to employ certain employees and authorizes the board of directors to confer on the manager the power to employ and discharge employees. The revised law omits that provision because it duplicates, in substance, Section 49.056 and part of Section 49.057(a), Water Code. The omitted law reads:

Sec. 4. … [The Board shall] appoint necessary engineers, attorneys and other employees and … . The power to employ and discharge employees may be conferred upon the manager… .

(4) Section 4, V.A.C.S. Article 8280-270, requires the board to adopt a seal for the authority. The revised law omits that provision because it duplicates Section 49.061, Water Code. The omitted law reads:

Sec. 4. … The Board shall adopt a seal for the Authority.

[Sections 9009.110-9009.150 reserved for expansion]

SUBCHAPTER D. GENERAL POWERS AND DUTIES

Revised Law

Sec. 9009.151. ACQUISITION AND USE OF WATER FROM CORPUS CHRISTI. (a) The authority may acquire from Corpus Christi untreated water supplied from Lake Corpus Christi, subject to a contract between the authority and Corpus Christi that is approved by the Nueces district or under a contract assigned to the authority.

(b) The authority may procure water under Subsection (a) only if the water is "surplus" to the requirements of Corpus Christi as defined in a contract between Corpus Christi and the Nueces district.

(c) The authority may use water procured under Subsection (a) as a source of water supply for the city if the right of the city to execute a contract prescribing the obligations of the city and the authority is approved by the voters of the city in compliance with Section 402.020, Local Government Code.

(d) The authority may contract with Corpus Christi or the Nueces district, or both, in reference to the authority's duty or option to participate in the cost of any future enlargement of Lake Corpus Christi and for a commensurate share of the increased water yield. (V.A.C.S. Art. 8280-270, Sec. 6 (part).)

Source Law

Sec. 6. The Authority is authorized to acquire untreated water from the City of Corpus Christi, Texas … to be supplied from Lake Corpus Christi, subject to a contract or contracts to be executed by and between Authority and Corpus Christi, approved by Lower Nueces Water Supply District … or under such contract or contracts assigned to Authority. The water thus to be procured, which must be that which is "surplus" to the requirements of Corpus Christi, as "surplus" is defined in a contract between Corpus Christi and Nueces, may be used by Authority as a source of water supply for the City; provided the right of City to execute a contract prescribing the obligations of City and Authority is duly voted in the City in compliance with Article 1109 (e) Vernon's Texas Statutes. Authority may contract with Corpus Christi or Nueces, or both, in reference to Authority's duty or option to participate in the cost of any future enlargement of Corpus Christi Reservoir and for a commensurate share of increased water yield.

Revisor's Note

(1) Section 6, V.A.C.S. Article 8280-270, refers to the requirement that a vote be held on a contract between a municipality and a water district under "Article 1109 (e) Vernon's Texas Statutes." The full citation to the referenced law is Chapter 342, Acts of the 51st Legislature, Regular Session, 1949 (Article 1109e, Vernon's Texas Civil Statutes). That statute was codified as Section 402.020, Local Government Code, by Chapter 149, Acts of the 70th Legislature, Regular Session, 1987. The revised law is drafted accordingly.

(2) Section 6, V.A.C.S. Article 8280-270, refers to "Corpus Christi Reservoir." For consistency of references throughout this chapter, the revised law substitutes "Lake Corpus Christi" for the quoted language because "Lake Corpus Christi" refers to the same body of water as "Corpus Christi Reservoir."

Revised Law

Sec. 9009.152. WATER FACILITIES. (a) The authority may acquire or construct, inside or outside the authority:

(1) a diversion works;

(2) wells;

(3) pumps;

(4) pumping stations;

(5) pipelines;

(6) intermediate and terminal storage reservoirs;

(7) a water treatment plant; and

(8) any other related facility necessary or useful in diverting, impounding, drilling, storing, or treating water, or in transporting treated or untreated water to the city for municipal, domestic, agricultural, industrial, or any other purpose.

(b) A diversion works may be constructed to take water from Lake Corpus Christi through intake or otherwise or from the Nueces River below Lake Corpus Christi.

(c) The specifications in this section of certain elements of the authority's proposed water supply, treatment, and transportation system do not preclude the authority from constructing any facility necessary or convenient in enabling the authority to deliver treated or untreated water to the city. (V.A.C.S. Art. 8280-270, Sec. 7.)

Source Law

Sec. 7. Authority is authorized to acquire, construct, or cause to be constructed, inside or outside of the Authority's boundaries, a diversion works, wells, pumps, pumping stations, pipelines, intermediate and terminal storage reservoirs, a water treatment plant and all other related facilities which are necessary or useful in diverting, impounding, drilling, storing, or treating water, or in transporting treated or untreated water to the City for municipal, domestic, agricultural, industrial, or other purposes. Such diversion works may be so constructed as to permit the taking of water from Corpus Christi Lake through intake or otherwise or from Nueces River below the Lake, as may be determined by Authority. The specifications contained in this Section of certain elements of the Authority's proposed water supply, treatment, and transportation system, shall not preclude Authority from constructing all facilities necessary or convenient in enabling Authority to deliver treated or untreated water to City.

Revisor's Note

Section 7, V.A.C.S. Article 8280-270, refers to "Corpus Christi Lake." The revised law substitutes "Lake Corpus Christi" for "Corpus Christi Lake" for consistency in this chapter.

Revised Law

Sec. 9009.153. REGIONAL WASTE DISPOSAL. The authority may exercise the powers granted by Chapter 30, Water Code. (V.A.C.S. Art. 8280-270, Sec. 6B.)

Source Law

Sec. 6B. The Authority may exercise those powers granted by Chapter 30, Water Code.

Revised Law

Sec. 9009.154. APPROPRIATION PERMITS. The authority may:

(1) obtain an appropriation permit from the Texas Commission on Environmental Quality as provided by Section 12.011, Water Code; or

(2) participate with Corpus Christi or the Nueces district in obtaining a required appropriation permit. (V.A.C.S. Art. 8280-270, Sec. 8.)

Source Law

Sec. 8. To the extent authorized or required by law, the Authority is empowered to obtain an appropriation permit or permits from the Board of Water Engineers, as provided in Chapter 1 of Title 128, Revised Civil Statutes of 1925, as amended, or it is authorized to participate with Corpus Christi or Nueces in obtaining any such required permit.

Revisor's Note

(1) Section 8, V.A.C.S. Article 8280-270, provides that the authority may obtain certain permits "[t]o the extent authorized or required by law." The revised law omits the quoted language because the absence of the language does not authorize the authority to take actions inconsistent with the law.

(2) Section 8, V.A.C.S. Article 8280-270, refers to a permit issued by the "Board of Water Engineers." The revised law substitutes the name of the agency now authorized to issue the permit, the Texas Commission on Environmental Quality, for "Board of Water Engineers." The Board of Water Engineers, created by Chapter 171, General Laws, Acts of the 33rd Legislature, Regular Session, 1913, became the Texas Water Commission under Chapter 4, Acts of the 57th Legislature, 3rd Called Session, 1962. The name of the agency was changed to the Texas Water Rights Commission by Chapter 296, Acts of the 59th Legislature, Regular Session, 1965. In 1977, Section 9, Chapter 870, Acts of the 65th Legislature, Regular Session, abolished the Texas Water Rights Commission and created the Texas Water Commission. The name of the Texas Water Commission was changed to the Texas Natural Resource Conservation Commission by Section 1.085, Chapter 3, Acts of the 72nd Legislature, 1st Called Session, 1991. Section 18.01, Chapter 965, Acts of the 77th Legislature, Regular Session, 2001, changed the name of the Texas Natural Resource Conservation Commission to the Texas Commission on Environmental Quality. The revised law is drafted accordingly.

(3) Section 8, V.A.C.S. Article 8280-270, refers to an appropriation permit obtained as provided by Chapter 1, Title 128, Revised Statutes, "as amended." The relevant portion of Chapter 1, Title 128, Revised Statutes, was codified as Section 6.057, Water Code, by Chapter 58, Acts of the 62nd Legislature, Regular Session, 1971. Section 6.057, Water Code, was revised as Section 12.011, Water Code, by Chapter 870, Acts of the 65th Legislature, Regular Session, 1977, and the revised law is drafted accordingly. Throughout this chapter, the revised law omits the references to "as amended" because under Section 311.027, Government Code (Code Construction Act), a reference to a statute applies to all reenactments, revisions, or amendments of that statute unless expressly provided otherwise.

Revised Law

Sec. 9009.155. ACQUISITION OF PROPERTY. (a) To exercise a right or perform a duty under this chapter, the authority may acquire:

(1) works, machinery, plants, or other facilities; and

(2) land, rights-of-way, or easements.

(b) Subject to the terms of a deed of trust or indenture executed by the authority, the authority may sell, trade, lease, rent, or otherwise dispose of any property the board considers not needed for authority purposes. (V.A.C.S. Art. 8280-270, Sec. 9.)

Source Law

Sec. 9. The Authority is authorized to acquire all works, machinery, plants and other facilities and to acquire land, rights-of-way and easements for the purpose of exercising its rights and performing its duties under this Act. Subject to the application of the terms of any deed of trust or indenture executed by the Authority, it may sell, trade, lease, rent, or otherwise dispose of any real or personal property deemed by the Board not to be needed for Authority purposes.

Revisor's Note

Section 9, V.A.C.S. Article 8280-270, refers to "real or personal property." The revised law omits the reference to "real or personal" property because under Section 311.005, Government Code (Code Construction Act), "property" means "real and personal property."

Revised Law

Sec. 9009.156. GENERAL CONTRACT POWERS. The authority may contract with the city, a public agency, a political subdivision, this state, the United States, or another person for the purchase or sale of water or any other purpose necessary to carry out this chapter. (V.A.C.S. Art. 8280-270, Sec. 6A.)

Source Law

Sec. 6A. The Authority may contract with the City, a person, firm, corporation, public agency, political subdivision, the State, or the United States or an agency of the United States, for the purchase or sale of water or for any other purpose necessary to carry out this Act.

Revisor's Note

(1) Section 6A, V.A.C.S. Article 8280-270, refers to "a person, firm, [or] corporation." The revised law omits the references to "firm" and "corporation" because under Section 311.005(2), Government Code (Code Construction Act), "person" is defined to include a corporation or any other legal entity.

(2) Section 6A, V.A.C.S. Article 8280-270, refers to "the United States or an agency of the United States." The revised law omits the reference to "an agency of the United States" because under Section 311.005(9), Government Code (Code Construction Act), "United States" includes an agency of the United States.

Revised Law

Sec. 9009.157. AWARD OF CERTAIN CONSTRUCTION CONTRACTS. (a) This section applies only to a construction contract requiring an expenditure of more than $2,000.

(b) A contract may be awarded only after notice of the contract to bidders for sealed bids is published once a week for two weeks in a newspaper of general circulation in the authority that is designated or approved by the board.

(1) the time and place for opening the bids;

(2) the general nature of the work to be done or the material, equipment, or supplies to be purchased; and

(3) the place where and the terms on which copies of the plans and specifications may be obtained.

(d) The bids must be opened publicly. (V.A.C.S. Art. 8280-270, Sec. 11.)

Source Law

Sec. 11. Any construction contract requiring an expenditure of more than Two Thousand Dollars ($2,000.00) shall be made after publication of a notice to bidders once each week for two (2) weeks for sealed bids before awarding the contract. Such bids shall be opened publicly. Such notice shall be sufficient if it states the time and place when and where the bids will be opened, the general nature of the work to be done, or the material, equipment or supplies to be purchased, and states where and the terms upon which copies of the plans and specifications may be obtained. The publication shall be in a newspaper of general circulation in the Authority and designated or approved by the Board.

Revised Law

Sec. 9009.158. ASSIGNMENT OF CONTRACT RIGHTS. (a) The authority may acquire by assignment any right of the city under a contract between the city and Corpus Christi in reference to such water supply.

(b) If the assignment is accepted, the authority shall assume the city's obligations under the contract. (V.A.C.S. Art. 8280-270, Sec. 18.)

Source Law

Sec. 18. Authority may acquire by assignment any rights belonging to City by virtue of any contract between City and Corpus Christi in reference to such water supply, and if such assignment is accepted Authority shall assume City's obligations under such contract.

Revisor's Note

(End of Subchapter)

Section 3(a), V.A.C.S. Article 8280-270, provides that the powers of the authority are exercised by the board. The revised law omits the provision because it duplicates, in substance, provisions of Sections 49.051 and 49.057, Water Code. The omitted law reads:

Sec. 3. (a) All powers of the Authority shall be exercised by [a Board of Directors] … .

[Sections 9009.159-9009.200 reserved for expansion]

SUBCHAPTER E. EMINENT DOMAIN AND RELATED POWERS

Revised Law

Sec. 9009.201. EMINENT DOMAIN IN JIM WELLS COUNTY. (a) The authority may exercise the power of eminent domain in Jim Wells County to acquire fee simple title to, an easement or right-of-way in or on, or other interest in land or other property inside or outside the authority, necessary to the exercise of the authority's powers, rights, privileges, and functions under this chapter.

(b) The authority may acquire a property interest under Subsection (a) in the manner provided by Chapter 21, Property Code, or in the manner provided by a statute relating to condemnation by a general law district created under Section 59, Article XVI, Texas Constitution.

(c) The authority is a municipal corporation for the purposes of Section 21.021, Property Code. (V.A.C.S. Art. 8280-270, Sec. 10(a) (part).)

Source Law

Sec. 10. (a) The Authority shall have the right to acquire by condemnation the fee simple title to, easements or rights-of-way in or upon, or other interests in land and other property and easements within and without the boundaries of the Authority within Jim Wells County, necessary to the exercise of the powers, rights, privileges and functions conferred upon the Authority by this Act in the manner provided by Title 52, Revised Civil Statutes, as amended, relating to eminent domain, or at the option of the Authority in the manner provided by Statutes relative to condemnation by Districts organized under General Law pursuant to Section 59, Article 16 of the Constitution of the State of Texas. This Authority is hereby declared to be a municipal corporation within the meaning of Article 3268 of said Title 52… .

Revisor's Note

(1) Section 10(a), V.A.C.S. Article 8280-270, provides that the authority may acquire land and easements "by condemnation" in the manner provided by the law "relating to eminent domain." The revised law substitutes "exercise the power of eminent domain" for the quoted language because the phrases have the same meaning and the latter phrase is consistent with modern usage in laws relating to eminent domain.

(2) Section 10(a), V.A.C.S. Article 8280-270, refers to Title 52, Revised Statutes. The relevant provisions of Title 52 were codified as Chapter 21, Property Code, by Chapter 576, Acts of the 68th Legislature, Regular Session, 1983. The revised law is drafted accordingly.

(3) Section 10(a), V.A.C.S. Article 8280-270, refers to Article 3268, Revised Statutes. The applicable part of that statute was codified as Section 21.021, Property Code, by Chapter 576, Acts of the 68th Legislature, Regular Session, 1983. The revised law is drafted accordingly.

Revised Law

Sec. 9009.202. EMINENT DOMAIN IN NUECES COUNTY. (a) Except as provided by this section, the authority has the same power of eminent domain in Nueces County as it has in Jim Wells County.

(b) The power is strictly limited to an acquisition necessary to acquire:

(1) an easement or right-of-way necessary to build a pipeline from the city to a point on the Nueces River from which water will be obtained from Corpus Christi under a contract;

(2) fee simple title to any land reasonably necessary for the erection of a pumping station or stations near the pipeline to be built under Subdivision (1); or

(3) land or an interest in land located inside or outside the authority on which to place reservoirs, works, wells, plants, transmission lines, or other facilities necessary or helpful in impounding, storing, or treating water or in transporting water to the city or to others for municipal, domestic, agricultural, commercial, or other purposes. (V.A.C.S. Art. 8280-270, Sec. 10(b).)

Source Law

(b) Solely for the limited purposes enumerated herein and for no other purpose, the Authority shall have the right to exercise the power of eminent domain in Nueces County similar to the power granted in Jim Wells County by Subsection (a) hereof, but such power shall be strictly limited and confined to those acquisitions necessary for the following purposes, to-wit:

(1) To acquire easements or rights-of-way necessary to build a pipeline from the City of Alice to a point of contact on the Nueces River from which water will be obtained from Corpus Christi pursuant to contract;

(2) To acquire fee simple title to such land as shall be reasonably necessary for the erection of a pumping station or stations near or adjacent to the pipeline to be built pursuant to Subsection (b)(1) hereof; and

(3) To acquire land or an interest in land located inside or outside the Authority's boundaries on which to place reservoirs, works, wells, plants, transmission lines, or other facilities necessary or helpful in impounding, storing, or treating water or in transporting water to the City or to others for municipal, domestic, agricultural, commercial, or other purposes.

Revisor's Note

(1) Section 10(b), V.A.C.S. Article 8280-270, grants the authority the power of eminent domain in Nueces County "[s]olely for the limited purposes enumerated herein and for no other purpose," which "shall be strictly limited and confined to those acquisitions necessary for the following purposes." The revised law omits the former quoted phrase as unnecessary because it has the same meaning as the latter phrase. Similarly, the revised law substitutes "strictly limited" for "strictly limited and confined" because the phrases are synonymous and the former is more concise.

(2) Section 10(b), V.A.C.S. Article 8280-270, refers to land for the erection of a pumping station "near or adjacent to" the pipeline to be built. The revised law omits the phrase "adjacent to" because the meaning of that phrase is included in the meaning of "near."

Revised Law

Sec. 9009.203. DETERMINATION OF INTEREST TO BE ACQUIRED. The board shall determine the amount and character of interest in land, easements, or other property to be acquired under this subchapter. (V.A.C.S. Art. 8280-270, Sec. 10(a) (part).)

Source Law

Sec. 10. (a) … The amount of and character of interest in land, other property and easements thus to be acquired shall be determined by the Board of Directors… .

Revised Law

Sec. 9009.204. SURVEYS. The authority has the same rights and powers to make surveys and attend to other business of the authority in Jim Wells and Nueces Counties as provided by Section 49.221, Water Code. (V.A.C.S. Art. 8280-270, Sec. 10(a) (part).)

Source Law

Sec. 10. (a) … The Authority shall have the same rights and powers within such counties as are conferred upon water control and improvement districts by Section 49 of Chapter 25, Acts of the 39th Legislature, with reference to making surveys and attending to other business of the Authority.

Revisor's Note

(1) Section 10(a), V.A.C.S. Article 8280-270, refers to Section 49, Chapter 25, Acts of the 39th Legislature, Regular Session, 1925. That statute was codified as Section 51.136, Water Code, by Chapter 58, Acts of the 62nd Legislature, Regular Session, 1971. Chapter 715, Acts of the 74th Legislature, Regular Session, 1995, repealed Section 51.136, Water Code, and enacted Section 49.221, Water Code, which contains the substance of that repealed provision. The revised law is drafted accordingly.

(2) Section 10(a), V.A.C.S. Article 8280-270, provides that the authority has the same rights and powers that Section 49, Chapter 25, Acts of the 39th Legislature, Regular Session, 1925, confers on "water control and improvement districts." For the reason stated in Revisor's Note (1), the reference to that act is changed in the revised law to Section 49.221, Water Code. The revised law omits the reference to "water control and improvement districts" because the provisions of Chapter 49, Water Code, apply generally to those districts.

Revised Law

Sec. 9009.205. COST OF RELOCATING OR ALTERING PROPERTY. (a) In this section, the term "sole expense" means the actual cost of the relocation, raising, lowering, rerouting, change in grade, or alteration of construction under Subsection (b) to provide a comparable replacement without enhancing the facility, after deducting the net salvage value derived from the old facility.

(b) If the authority's exercise of eminent domain, relocation, or another power conferred by this chapter makes necessary relocating, raising, rerouting, changing the grade of, or altering the construction of any highway, railroad, electric transmission line, telephone or telegraph property and facility, or pipeline, the action shall be accomplished at the sole expense of the authority. (V.A.C.S. Art. 8280-270, Sec. 10(c).)

Source Law

(c) In the event that the Authority, in the exercise of the power of eminent domain or power of relocation, or any other power granted hereunder, makes necessary the relocation, raising, rerouting or changing the grade of, or altering the construction of any highway, railroad, electric transmission line, telephone or telegraph properties and facilities, or pipelines, all such necessary relocation, raising, rerouting, changing of grade or alteration of construction shall be accomplished at the sole expense of the Authority. The term "sole expense" shall mean the actual cost of such relocation, raising, lowering, rerouting, or change in grade or alteration of construction in providing comparable replacement without enhancement of such facilities, after deducting therefrom the net salvage value derived from the old facility.

[Sections 9009.206-9009.250 reserved for expansion]

SUBCHAPTER F. REGULATORY POWERS

Revised Law

Sec. 9009.251. ADOPTION OF RULES. The board may adopt reasonable rules to:

(1) secure, maintain, and preserve the sanitary condition of water in and water that flows into any intermediate or terminal reservoir owned by the authority;

(2) prevent waste of or the unauthorized use of water; and

(3) regulate resident, hunting, fishing, boating, camping, and any other recreational or business privilege along or around any reservoir, body of land, or easement owned by the authority. (V.A.C.S. Art. 8280-270, Sec. 22(a).)

Source Law

Sec. 22. (a) The Board of the Authority shall have the power to adopt and promulgate all reasonable regulations to secure, maintain and preserve the sanitary condition of all water in and to flow into any intermediate or terminal reservoir owned by the Authority to prevent waste of water or the unauthorized use thereof, to regulate resident, hunting, fishing, boating and camping, and all recreational and business privileges, along or around any such reservoir or any body of land, or easement owned by the Authority.

Revisor's Note

(1) Section 22(a), V.A.C.S. Article 8280-270, refers to the authority's power to "adopt and promulgate" reasonable regulations. The revised law omits the reference to "promulgate" because, in context, "promulgate" is included in the meaning of "adopt."

(2) Section 22(a), V.A.C.S. Article 8280-270, refers to "regulations" adopted by the authority. Throughout this chapter, the revised law substitutes "rules" for "regulations" or "rules and regulations" because in context the terms are synonymous and under Section 311.005(5), Government Code (Code Construction Act), a rule is defined to include a regulation. That definition applies to the revised law.

Revised Law

Sec. 9009.252. ENFORCEMENT OF RULES; PENALTY. (a) The authority by rule may prescribe reasonable penalties for the violation of an authority rule.

(b) A penalty may consist of:

(1) a fine not to exceed $200;

(2) confinement in jail for a term not to exceed 30 days; or

(3) both the fine and confinement.

(c) A penalty adopted under this section is in addition to any other penalty provided by Texas law. (V.A.C.S. Art. 8280-270, Sec. 22(b) (part).)

Source Law

(b) Such Authority may prescribe reasonable penalties for the breach of any regulation of the Authority, which penalties shall not exceed fines of more than Two Hundred Dollars ($200.00), or imprisonment for not more than thirty (30) days, or may provide both such fine and such imprisonment. The penalties hereby authorized shall be in addition to any other penalties provided by the laws of Texas and … [provided, however, that no rule or regulation which provides a penalty for the violation thereof] … .

Revisor's Note

(1) Section 22(b), V.A.C.S. Article 8280-270, provides for the maximum fines and imprisonment the authority may impose for the violation of authority rules. The revised law restructures the provision and substitutes "confinement" for "imprisonment" to conform to the penalty structure and terminology of the Penal Code.

(2) Section 22(b), V.A.C.S. Article 8280-270, provides that a criminal penalty adopted by the board may be enforced by complaints filed in the appropriate court. The revised law omits the reference to complaints because the Code of Criminal Procedure, applicable to all criminal proceedings in this state under Article 1.02 of that code, provides that the prosecution of an offense may be initiated by the filing of a complaint before a magistrate or a district or county attorney. The revised law omits the reference to "the appropriate court of jurisdiction" because the constitution and general laws of this state determine which courts have jurisdiction to accept a criminal complaint charging the violation of a rule adopted by the board for which the board has also adopted a penalty under this section. The omitted law reads:

(b) [The penalties] … may be enforced by complaints filed in the appropriate court of jurisdiction, … .

Revised Law

Sec. 9009.253. NOTICE OF RULE PROVIDING PENALTY. (a) If the authority adopts a rule that provides a penalty, the authority must publish a substantive statement of the rule and the penalty once a week for two consecutive weeks in each county in which any part of the reservoir to which the rule applies is situated.

(b) The statement must be as condensed as possible so that the act prohibited by the rule can be easily understood.

(d) The notice must state that:

(1) a person who violates the rule is subject to a penalty; and

(2) the rule is on file in the principal office of the authority, where it may be read by any interested person.

(e) A rule takes effect five days after the date of second publication of the statement under this section. (V.A.C.S. Art. 8280-270, Sec. 22(b) (part).)

Source Law

(b) … provided, however, that no rule or regulation which provides a penalty for the violation thereof shall be in effect, as to enforcement of the penalty, until five (5) days next after the Authority may have caused a substantive statement of the particular rule or regulation and the penalty for the violation thereof to be published, once a week for two (2) consecutive weeks in the county in which such reservoir is situated, or in any county in which it is partly situated. The substantive statement so to be published shall be as condensed as is possible to afford an intelligent direction of the mind to the act forbidden by the rule or regulation; one (1) notice may embrace any number of regulations; there must be embraced in the notice advice that breach of the particular regulation, or regulations, will subject the violator to the infliction of a penalty and there also shall be included in the notice advice that the full text of the regulations sought to be enforced is on file in the principal office of the Authority, where the same may be read by any interested person. Five (5) days after the second publication of the notice hereby required, the advertised regulation shall be in effect, and ignorance of any such regulation shall not constitute a defense to a prosecution for the enforcement of a penalty, and … .

Revisor's Note

Section 22(b), V.A.C.S. Article 8280-270, provides that "ignorance of any such regulation shall not constitute a defense to a prosecution for the enforcement of a penalty." The revised law omits the quoted language because it duplicates, in substance, Section 8.03(a), Penal Code, applicable to the revised law under Section 1.03(b) of that code.

Revised Law

Sec. 9009.254. JUDICIAL NOTICE OF RULES. A court shall take judicial notice of a rule adopted under this subchapter and published as required by Section 9009.253, and the court shall consider the rule to be similar in nature to a penal ordinance of a municipality. (V.A.C.S. Art. 8280-270, Sec. 22(b) (part).)

Source Law

(b) … the rules and regulations authorized hereby, after the required publication, shall judicially be known to the courts and shall be considered of a nature like unto that of valid penal ordinance of a city of the state.

Revisor's Note

Section 22(b), V.A.C.S. Article 8280-270, refers to a "valid penal ordinance of a city of the state." The revised law omits "valid" as unnecessary because the word does not add to the clear meaning of the law. An ordinance is not an ordinance if it is not valid. The revised law substitutes "municipality" for "city of the state" because that is the term used in the Local Government Code.

Revised Law

Sec. 9009.255. ENFORCEMENT BY PEACE OFFICERS. (a) A peace officer may make an arrest when necessary to prevent or abate the commission of an offense:

(1) in violation of an authority rule or a law of this state that occurs or threatens to occur on any land, water, or easement owned or controlled by the authority; or

(2) involving damage to any property owned or controlled by the authority.

(b) A peace officer may make an arrest under Subsection (a)(2) at any location. (V.A.C.S. Art. 8280-270, Sec. 22(c).)

Source Law

(c) Any duly constituted peace officer shall have the power to make arrests when necessary to prevent or abate the commission of any offense against the regulations of the Authority, and against the laws of the State of Texas, when any such offense or threatened offense, occurs upon any land, water, or easement owned or controlled by the Authority, or to make such arrest at any place, in case of an offense involving injury or detriment to any property owned or controlled by such Authority.

Revisor's Note

(1) Section 22(c), V.A.C.S. Article 8280-270, refers to a "duly constituted" peace officer. The revised law omits "duly constituted" as unnecessary because the phrase does not add to the clear meaning of the law. A person purporting to be a peace officer is not a peace officer if the person is not duly constituted.

(2) Section 22(c), V.A.C.S. Article 8280-270, refers to an offense involving "injury or detriment." The revised law substitutes "damage" for "injury or detriment" because "damage" conforms to the terminology of the Penal Code regarding property offenses.

[Sections 9009.256-9009.300 reserved for expansion]

SUBCHAPTER G. GENERAL FINANCIAL PROVISIONS

Revised Law

Sec. 9009.301. DEPOSITORY. (a) Except as provided by Subsection (h), the board shall designate one or more banks in the authority to serve as depository for authority money.

(b) Authority money shall be deposited with a designated depository bank, except that:

(1) money pledged to pay bonds may be deposited with the trustee bank named in the trust agreement; and

(2) money shall be remitted to the bank of payment for the payment of principal of and interest on bonds.

(c) To the extent that money in a depository bank or the trustee bank is not insured by the Federal Deposit Insurance Corporation, the money must be secured in the manner provided by law for the security of county funds.

(d) The board shall prescribe the terms of service for depositories.

(e) Before designating a depository bank, the board shall mail a written notice to each bank in the authority at least 10 days before the date set for receiving bids that:

(1) states the time and place at which the board will meet to designate a depository bank or banks; and

(2) invites each bank in the authority to submit an application to be designated as a depository.

(f) At the time stated in the notice, the board shall:

(1) consider the application and the management and condition of each bank that applies; and

(2) designate as a depository the bank or banks:

(A) that offer the most favorable terms for the handling of the money; and

(B) that the board finds have proper management and are in condition to handle the money.

(g) Membership on the board of an officer or director of a bank does not disqualify the bank from being designated as a depository.

(h) If the board does not receive any applications before the time stated in the notice, the board may designate one or more banks located inside or outside the authority on terms that the board finds advantageous to the authority. (V.A.C.S. Art. 8280-270, Sec. 17.)

Source Law

Sec. l7. (a) The Board shall designate one (1) or more banks within the Authority to serve as depository for the funds of the Authority. All funds of the Authority shall be deposited in such depository bank or banks except that funds pledged to pay bonds may be deposited with the trustee bank named in the trust agreement, and except that funds shall be remitted to the bank or banks of payment for the payment of principal of and interest on bonds. To the extent that funds in the depository banks and the trustee bank are not insured by the Federal Deposit Insurance Corporation they shall be secured in the manner provided by law for the security of county funds.

(b) Before designating a depository bank or banks, the Board shall issue a notice stating the time and place when and where the Board will meet for such purpose and inviting the banks in the Authority to submit applications to be designated depositories. The terms of service for depositories shall be prescribed by the Board. Such notice shall be in writing and mailed to each bank within the Authority at least ten (10) days prior to the date fixed for receiving bids.

(c) At the time mentioned in the notice, the Board shall consider the applications and the management and condition of the banks filing them, and shall designate as depositories the bank or banks which offer the most favorable terms and conditions for the handling of the funds of the Authority, and which the Board finds have proper management and are in condition to warrant handling of Authority funds. Membership on the Board of an officer or director of a bank shall not disqualify such bank from being designated as depository.

(d) If no applications are received by the time stated in the notice, the Board may designate some bank or banks within or without Authority upon such terms and conditions as it may find advantageous to the Authority.

Revisor's Note

(1) Section 17, V.A.C.S. Article 8280-270, which provides for the selection of a depository bank, refers several times to monetary assets of the authority as "funds." Throughout this chapter, the revised law substitutes "money" for "funds" (except where a specific type of fund is indicated) because, in context, the meaning is the same and "money" is the more commonly used term.

(2) Sections 17(c) and (d), V.A.C.S. Article 8280-270, refer to "terms and conditions" that a bank proposes or agrees to for serving as the authority's depository. The revised law omits "conditions" because, in context, the meaning of "conditions" is included in the meaning of "terms."

Revised Law

Sec. 9009.302. TAX ASSESSOR AND COLLECTOR. The board shall appoint a tax assessor and collector. (V.A.C.S. Art. 8280-270, Sec. 21(b) (part).)

Source Law

(b) … the Board shall appoint a tax assessor and collector and … .

Revisor's Note

(1) Section 21(a), V.A.C.S. Article 8280-270, adopts the ad valorem tax rolls of the City of Alice as the tax rolls of the authority until the authority makes its tax rolls. The revised law omits the adoption of those tax rolls as executed. The omitted law reads:

Sec. 21. (a) The City tax rolls applicable to the property included in the Authority are hereby adopted and shall constitute the tax rolls of the Authority until assessments and tax rolls shall be made by the Authority.

(2) Section 21(b), V.A.C.S. Article 8280-270, provides that before issuing bonds payable partly or wholly from ad valorem taxes, the board shall appoint a tax assessor and collector. The revised law omits the language about the initial bonds as executed. The authority has sold and delivered bonds payable wholly or partly from ad valorem taxes.

Section 21(b) also provides that the authority's board shall appoint a board of equalization and equalize tax valuations. The revised law omits that provision because V.A.C.S. Article 7206 provided for boards of equalization and for the equalization of values for tax purposes. V.A.C.S. Article 7206 was expressly repealed by Section 6, Chapter 841, Acts of the 66th Legislature, Regular Session, 1979, the act that enacted Title 1, Tax Code. Under Title 1, boards of equalization were replaced by the appraisal review board for each appraisal district.

Section 21(b) further provides that the authority's board shall cause taxes to be assessed. The revised law omits that provision because Section 6.23(b), Tax Code, provides that the assessor and collector for a taxing unit other than a county shall assess, collect, or assess and collect taxes, as applicable, for the unit. Section 6.23(b), Tax Code, applies to the authority under Section 1.02, Tax Code.

Section 21(b) further provides that the authority's board shall have tax rolls prepared. The revised law omits that provision for the reason stated in Revisor's Note (1) to this section.

Section 21(b) also provides that certain tax-related general water district laws apply to the authority. The revised law omits that provision as repealed by Chapter 841, Acts of the 66th Legislature, Regular Session, 1979, enacting Title 1, Tax Code, a comprehensive, substantive codification of the laws governing the administration of ad valorem taxes, and repealing all other general, local, and special laws in conflict with that act, and as superseded by Section 1.02, Tax Code, which provides for the applicability of Title 1, Tax Code, to all taxing units in this state, including water control and improvement districts. The omitted law reads:

(b) Prior to the sale and delivery of Authority bonds which are payable wholly or partially from ad valorem taxes [the Board shall appoint] … a board of equalization and cause taxes to be assessed, valuations to be equalized, and tax rolls to be prepared. General Laws applicable to water control and improvement districts with reference to tax assessors and collectors, boards of equalization, tax rolls and the levy and collection of taxes and delinquent taxes shall be applicable to this Authority… .

(3) Section 21(b), V.A.C.S. Article 8280-270, provides that the board may contract with the city to collect taxes. The revised law omits that provision as repealed by Chapter 841, Acts of the 66th Legislature, Regular Session, 1979, enacting Title 1, Tax Code, and repealing all other general, local, and special laws in conflict with that act, and as superseded by Section 6.24(a), Tax Code. Section 6.24(a), Tax Code, provides that the governing body of a taxing unit other than a county may contract as provided by the Interlocal Cooperation Act with the governing body of another unit or with the board of directors of an appraisal district for the other unit or the district to perform duties relating to the assessment or collection of taxes. Section 6.24(a), Tax Code, applies to the authority under Section 1.02, Tax Code. The omitted law reads:

(b) … The Board is authorized by contract with City to provide that the taxes of the Authority may be collected by the tax collector of City.

Revised Law

Sec. 9009.303. PROJECTS EXEMPT FROM ASSESSMENT OR TAXATION. The authority is not required to pay a tax or assessment on a project or any part of a project. (V.A.C.S. Art. 8280-270, Sec. 20 (part).)

Source Law

Sec. 20. … The Authority shall not be required to pay any tax or assessment on the project or any part thereof, and … .

[Sections 9009.304-9009.350 reserved for expansion]

SUBCHAPTER H. BONDS

Revised Law

Sec. 9009.351. AUTHORITY TO ISSUE BONDS. The authority may issue bonds to carry out any power conferred by this chapter. The bonds must be authorized by a board resolution. (V.A.C.S. Art. 8280-270, Secs. 12(a) (part), (b) (part), (c) (part).)

Source Law

Sec. 12. (a) For the purpose of carrying out any power or authority conferred by this Act, the Authority is empowered to issue its negotiable bonds … .

(b) Such bonds shall be authorized by resolution of the Board and … .

Revisor's Note

(1) Section 12(a), V.A.C.S. Article 8280-270, refers to a "power or authority" conferred on the authority. The revised law omits the reference to "authority" because "authority" is included in the definition of "power."

(2) Section 12(a), V.A.C.S. Article 8280-270, refers to "negotiable" bonds. The revised law omits "negotiable" because under Section 1201.041, Government Code, a public security is a negotiable instrument. Section 1201.041, Government Code, applies to authority bonds by application of Section 1201.002, Government Code.

(3) Section 12(c), V.A.C.S. Article 8280-270, provides that bonds may be issued in "more than one (1) series and from time to time." The revised law omits "more than one (1) series" because it duplicates a provision of Section 1201.022, Government Code, which applies to authority bonds by application of Section 1201.002, Government Code. The revised law omits "from time to time" because the power to issue bonds implies the power to do so at any time. The omitted law reads:

Revised Law

Sec. 9009.352. FORM OF BONDS. An authority bond must be:

(1) issued in the authority's name;

(2) signed by the president or vice president; and

(3) attested by the secretary. (V.A.C.S. Art. 8280-270, Sec. 12(b) (part).)

Source Law

(b) [Such bonds] … shall be issued in the name of the Authority, signed by the president or vice-president, attested by the secretary and … .

Revisor's Note

Section 12(b), V.A.C.S. Article 8280-270, provides that bonds must bear the seal of the authority and authorizes facsimile "printed or lithographed" signatures and seals. The revised law omits those provisions as unnecessary. The requirement that the bonds bear the seal of the authority was impliedly repealed by Section 3, Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas Civil Statutes) (revised in relevant part in 1999 as Section 1201.026(a), Government Code), which provides that bonds may be signed with or without a seal. The authorization for the use of printed or lithographed signatures duplicates Section 1201.026(a), Government Code, which also provides that bonds and interest coupons may be signed or otherwise executed with manual or facsimile signatures. The omitted law reads:

(b) [Such bonds] … shall bear the seal of the Authority. It is provided, however, that the signatures of the president or of the secretary or of both may be printed or lithographed on the bonds if authorized by the Board, and the seal of the Authority may be impressed on the bonds or may be printed or lithographed thereon… .

Revised Law

Sec. 9009.353. MATURITY. Authority bonds must mature not later than 40 years after their date of issuance. (V.A.C.S. Art. 8280-270, Sec. 12(b) (part).)

Source Law

(b) … The bonds shall mature serially or otherwise in not to exceed forty (40) years and … .

Revisor's Note

Section 12(b), V.A.C.S. Article 8280-270, provides that authority bonds shall mature "serially or otherwise." The revised law omits the quoted language because it duplicates Section 1201.022(a)(1), Government Code, applicable to the revised law by application of Section 1201.002, Government Code.

Revised Law

Sec. 9009.354. ELECTION FOR BONDS PAYABLE FROM AD VALOREM TAXES. (a) Bonds, other than refunding bonds, payable wholly or partly from ad valorem taxes may not be issued unless authorized by a majority of the authority voters voting at an election.

(b) The board may order an election under this section without a petition. The order must specify:

(1) the time and places at which the election will be held;

(2) the purpose for which the bonds will be issued;

(3) the maximum amount of the bonds;

(4) the maximum maturity of the bonds;

(5) the form of the ballot; and

(6) the presiding judge for each voting place.

(c) Notice of the election must be given by publishing a substantial copy of the order calling the election in a newspaper of general circulation in the authority. The notice must be published on the same day in each of two consecutive weeks. The first publication must be not later than the 14th day before the date of the election. If a newspaper of general circulation is not published in the authority, notice must be given by posting a copy of the resolution in three public places in the authority. (V.A.C.S. Art. 8280-270, Secs. 12(e) (part), 15(a) (part), (b) (part).)

Source Law

[Sec. 12]

(e) After the authorizing election, required under Section 15 shall have been held and carried, [Authority is also empowered to issue bonds payable from ad valorem taxes] … .

Sec. 15. (a) No bonds payable wholly or partially from ad valorem taxes (except refunding bonds) shall be issued unless authorized by an election at which only the qualified voters residing in the Authority who own taxable property therein and who have duly rendered the same for taxation shall be allowed to vote, and unless a majority of the votes cast thereat is in favor of the issuance of the bonds… .

(b) Such election may be called by the Board without a petition. The resolution calling the election shall specify the time and places of holding the same, the purpose for which the bonds are to be issued, the maximum amount thereof, the maximum maturity thereof, the form of the ballot, and the presiding judge for each voting place… . Notice of the election shall be given by publishing a substantial copy of the resolution calling the election in a newspaper of general circulation in the Authority on the same day of each of two (2) consecutive weeks. The first publication shall be at least fourteen (14) days prior to the date set for the election. If no newspaper is published in the Authority, notice shall be given by posting a copy of the resolution in three (3) public places within the Authority.

Revisor's Note

(1) Section 15(a), V.A.C.S. Article 8280-270, provides that the authority may not issue bonds payable from ad valorem taxes unless authorized by a majority of "the qualified voters residing in the Authority who own taxable property therein and who have duly rendered the same for taxation." The revised law omits "qualified voters residing in the Authority" as unnecessary in this context because Chapter 11, Election Code, governs eligibility to vote in an election in this state and allows only qualified voters who are residents of the territory covered by the election to vote in an election. The revised law also omits the reference to voting by persons who own taxable property and render that property for taxation because in Hill v. Stone, 421 U.S. 289, 95 S. Ct. 1637 (1975), the United States Supreme Court determined that property ownership as a qualification for voting is an unconstitutional denial of equal protection.

(2) Section 15(b), V.A.C.S. Article 8280-270, provides that an election may be "called" by the board and refers to the "resolution calling the election." The revised law substitutes "order" for the quoted language because "called" or "calling" is included in the meaning of holding an election. Under Chapter 3, Election Code, all elections must be ordered (called) before they may be held.

(3) Section 15(b), V.A.C.S, Article 8280-270 (enacted in 1962), provides that the presiding judge may appoint an assistant judge and clerks to assist in holding the bond election. The revised law omits the provision as superseded by the 1985 enactment of the Election Code, applicable to the authority under Section 1.002, Election Code. Chapter 32, Election Code, governs the selection of election judges and clerks. The omitted law reads:

(b) … The presiding judge serving at each voting place may appoint one (1) assistant judge and two (2) clerks to assist in holding such election… .

(4) Section 15(c), V.A.C.S. Article 8280-270, provides that the board shall canvass the returns of a bond election. The revised law omits that provision because it duplicates Section 67.002, Election Code, which requires the governing body of a political subdivision that orders an election to canvass the returns. The omitted law reads:

(5) Section 15(d), V.A.C.S. Article 8280-270, provides that the general laws relating to elections apply to an election under that section except as otherwise provided by the act. The revised law omits that provision because Section 1.002, Election Code, provides that the Election Code applies to all elections held in this state. An exception to the application of the Election Code would apply by its own terms. The omitted law reads:

(d) The General Laws relating to elections shall be applicable to elections held under this Section of this law except as otherwise provided in this law.

Revised Law

Sec. 9009.355. BONDS PAYABLE FROM REVENUE. (a) In this section, "net revenue" means the gross revenue and income of the authority pledged under this section less the amount necessary to pay the cost of:

(1) performing any contract, the revenue of which is pledged under this section; and

(2) maintaining and operating the authority and its property.

(b) Bonds issued under this subchapter may be secured under board resolution by a pledge of:

(1) all or part of the net revenue of the authority other than revenue from taxation;

(2) the net revenue of one or more contracts made before or after the issuance of the bonds; or

(3) other revenue or income specified by resolution of the board or in the trust indenture or other instrument securing the bonds.

(c) The pledge may reserve the right to issue additional bonds on a parity with, or subordinate to, the bonds being issued, subject to the conditions specified in the pledge.

(d) Bonds not payable wholly or partly from ad valorem taxes may be issued without an election. (V.A.C.S. Art. 8280-270, Secs. 12(a) (part), (d), 15(a) (part).)

Source Law

[Sec. 12]

(a) … the Authority is empowered to issue … bonds to be payable from revenues or … as are pledged by resolution of the Board… .

(d) The bonds may be secured by a pledge of all or part of the net revenues of the Authority (other than from taxation), or by the net revenues of any one or more contracts theretofore or thereafter made or other revenues or income specified by resolution of the Board or in the trust indenture or other instrument securing the bonds. Any such pledge may reserve the right under conditions therein specified, to issue additional bonds which will be on a parity with or subordinate to the bonds then being issued. The term "net revenues" as used in this Section shall mean the gross revenues and income of the Authority thus pledged after deduction of the amount necessary to pay the cost of performing any such contract and of maintaining and operating the Authority and its properties.

Sec. 15. (a) … Bonds not payable wholly or partially from ad valorem taxes may be issued without an election.

Revised Law

Sec. 9009.356. BONDS PAYABLE FROM AD VALOREM TAXES. The authority may issue bonds payable, as pledged by board resolution, from:

(1) ad valorem taxes imposed on taxable property in the authority; or

(2) ad valorem taxes and revenue of the authority. (V.A.C.S. Art. 8280-270, Secs. 12(a) (part), (e) (part).)

Source Law

Sec. 12. (a) … the Authority is empowered to issue its negotiable bonds to be payable from … taxes or both revenues and taxes of the Authority as are pledged by resolution of the Board… .

(e) … Authority is also empowered to issue bonds payable from ad valorem taxes to be levied on all taxable property therein, or to issue bonds secured by and payable from both such taxes and the revenues of the Authority… .

Revisor's Note

(1) Section 12(a), V.A.C.S. Article 8280-270, refers to "negotiable" bonds. The revised law omits "negotiable" for the reason stated in Revisor's Note (2) to Section 9009.351.

(2) Section 12(e), V.A.C.S. Article 8280-270, refers to an ad valorem tax "levied" on taxable property. The revised law substitutes "imposed" for "levied" for the reason stated in Revisor's Note (2) to Section 9009.052.

Revised Law

Sec. 9009.357. TAX AND RATE REQUIREMENTS. (a) If the authority issues bonds payable wholly or partly from ad valorem taxes, the board shall impose a tax sufficient to pay the bonds and the interest on the bonds as the bonds and interest become due. The board may adopt the rate of the tax after considering the money received from the other pledged revenue available for payment of principal and interest to the extent and in the manner permitted by the resolution authorizing the issuance of the bonds.

(b) If the authority issues bonds payable wholly or partly from revenue, the board shall set and revise the rates of compensation for water sold and services rendered by the authority.

(1) pay the expense of operating and maintaining the facilities of the authority;

(2) pay the bonds as they mature and the interest as it accrues; and

(3) maintain the reserve and other funds as required in the resolution authorizing the issuance of the bonds or in the trust indenture or other instrument securing the bonds.

(d) For bonds payable partly from revenue, the rates of compensation must be sufficient to assure compliance with the resolution authorizing the issuance of the bonds and any trust indenture or other instrument securing the bonds. (V.A.C.S. Art. 8280-270, Secs. 12(e) (part), (f).)

Source Law

(e) … Where bonds are issued payable wholly or partially from ad valorem taxes, it shall be the duty of the Board to levy a tax sufficient to pay the bonds and the interest thereon as such bonds and interest become due, but the rate of the tax for any year may be fixed after giving consideration to the money received from the other pledged revenues which may be available for payment of principal and interest to the extent and in the manner permitted by the resolution authorizing the issuance of the bonds.

(f) Where bonds payable wholly from revenues are issued, it shall be the duty of the Board to fix, and from time to time to revise the rates of compensation for water sold and services rendered by the Authority which will be sufficient to pay the expense of operating and maintaining the facilities of the Authority and to pay the bonds as they mature and the interest as it accrues and to maintain the reserve and other funds as required in the resolution authorizing the bonds or in the trust indenture or other instrument securing the bonds. Where bonds payable partially from revenues are issued it shall be the duty of the Board to fix, and from time to time revise, the rate of compensation for water sold and services rendered by the Authority which will be sufficient to assure compliance with the resolution authorizing the bonds and with any trust indenture or other instrument securing the bonds.

Revisor's Note

(1) Section 12(e), V.A.C.S. Article 8280-270, requires the board of directors to "levy" an ad valorem tax. The revised law substitutes "impose" for "levy" for the reason stated in Revisor's Note (2) to Section 9009.052.

(2) Section 12(e), V.A.C.S. Article 8280-270, provides that the rate of the ad valorem tax "for any year" may be "fixed" by the board. The revised law substitutes "adopt" for "fixed" to conform to the terminology used in Section 26.05, Tax Code. The revised law omits "for any year" because it duplicates Section 26.05(a), Tax Code, which provides that the governing body of a taxing unit shall adopt a tax rate annually.

(3) Section 12(f), V.A.C.S. Article 8280-270, provides that the board shall fix and from "time to time" revise the rates of compensation for water sold and services rendered by the authority. The revised law omits the quoted language because the duty to set and revise the rates of compensation includes the duty to revise them from time to time.

Revised Law

Sec. 9009.358. ADDITIONAL SECURITY. (a) Bonds, including refunding bonds, authorized by the law that are not payable wholly from ad valorem taxes may be additionally secured, at the discretion of the board, by a deed of trust or mortgage lien on physical property of the authority, franchises, easements, water rights and appropriation permits, leases, contracts, and all rights appurtenant to the property, vesting in the trustee power to:

(1) sell the property for the payment of the debt;

(2) operate the property; and

(3) take other action to further secure the bonds.

(b) A purchaser under a sale under the deed of trust lien, if one is given:

(1) is the absolute owner of property, facilities, and rights purchased; and

(2) is entitled to maintain and operate the property, facilities, and rights. (V.A.C.S. Art. 8280-270, Sec. 14 (part).)

Source Law

Sec. 14. [Any bonds (including refunding bonds) authorized by the law, not payable wholly from ad valorem taxes,] … . Such bonds, within the discretion of the Board, may be additionally secured by a deed of trust or mortgage lien upon physical properties of the Authority and all franchises, easements, water rights and appropriation permits, leases and contracts and all rights appurtenant to such properties, vesting in the trustee power to sell the properties for the payment of the indebtedness, power to operate the properties and all other powers and authority for the further security of the bonds… . Any purchaser under a sale under the deed of trust lien, where one is given, shall be the absolute owner of the properties, facilities and rights so purchased and shall have the right to maintain and operate the same.

Revised Law

Sec. 9009.359. TRUST INDENTURE. (a) A bond authorized by the law, including a refunding bond, that is not payable wholly from ad valorem taxes may be additionally secured by a trust indenture. The trustee may be a bank with trust powers located inside or outside this state.

(b) A trust indenture, regardless of the existence of the deed of trust or mortgage lien on the property, may:

(1) provide for the security of the bonds and the preservation of the trust estate in the manner prescribed by the board;

(2) provide for amendment or modification of the trust indenture;

(3) provide for the issuance of bonds to replace lost or mutilated bonds;

(4) condition the right to spend authority money or sell authority property on the approval of a licensed engineer selected as provided by the trust indenture; and

(5) provide for the investment of authority money. (V.A.C.S. Art. 8280-270, Sec. 14 (part).)

Source Law

Sec. 14. Any bonds (including refunding bonds) authorized by the law, not payable wholly from ad valorem taxes, may be additionally secured by a trust indenture under which the Trustee may be a bank, having trust powers, situated either inside or outside of the State of Texas… . Such trust indenture, regardless of the existence of the deed of trust or mortgage lien on the properties may contain any provisions prescribed by the Board for the security of the bonds and the preservation of the trust estate, and may make provision for amendment or modification thereof and the issuance of bonds to replace lost or mutilated bonds, and may condition the right to expend Authority money or sell Authority property upon approval of a registered professional engineer selected as provided therein, and may make provision for the investment of funds of the Authority… .

Revisor's Note

Section 14, V.A.C.S. Article 8280-270, refers to a "registered professional engineer." The revised law substitutes "licensed engineer" for the quoted language because under Chapter 1001, Occupations Code, engineers are licensed, not registered.

Revised Law

Sec. 9009.360. INTERIM BONDS OR NOTES. Before issuing definitive bonds, the board may issue interim bonds or notes exchangeable for definitive bonds. (V.A.C.S. Art. 8280-270, Sec. 12(a) (part).)

Source Law

Sec. 12. (a) … Pending the issuance of definitive bonds the Board may authorize the delivery of negotiable interim bonds or notes, eligible for exchange or substitution by use of the definitive bonds.

Revisor's Note

(1) Section 12(a), V.A.C.S. Article 8280-270, refers to "negotiable" interim bonds. The revised law omits "negotiable" for the reason stated in Revisor's Note (2) to Section 9009.351.

(2) Section 12(a), V.A.C.S. Article 8280-270, refers to bonds or notes "eligible for exchange or substitution." The revised law substitutes "exchangeable" for the quoted language because, in context, "substitution" is included in the meaning of "exchange."

Revised Law

Sec. 9009.361. USE OF BOND PROCEEDS. (a) The authority may set aside an amount of proceeds from the sale of bonds issued under this subchapter for payments into the interest and sinking fund and the reserve fund. The resolution authorizing the bonds or a trust indenture or other instrument securing the bonds may provide for setting aside amounts under this subsection.

(b) The authority may use proceeds from the sale of the bonds to pay any expense necessarily incurred in accomplishing the purpose of the authority, including any expense of issuing and selling the bonds.

(c) The authority may invest proceeds from the sale of the bonds in direct obligations of or obligations unconditionally guaranteed by the United States that mature in the manner authorized by the resolution authorizing the bonds or by the trust indenture or other instrument securing the bonds. (V.A.C.S. Art. 8280-270, Sec. 12(g).)

Source Law

(g) From the proceeds from the sale of the bonds, the Authority may set aside amounts for the payments into the interest and sinking fund and the reserve fund, and such provisions may be made in the resolution authorizing the bonds or any trust indenture or other instruments securing the bonds. Proceeds from the sale of the bonds may also be used for the payment of all expenses necessarily incurred in accomplishing the purpose for which this Authority is created, including expenses of issuing and selling the bonds. The proceeds from the sale of the bonds may be invested in direct obligations of, or unconditionally guaranteed by, the United States Government maturing in the manner that might be authorized by the resolution authorizing the bonds or the trust indenture or other instruments securing the bonds.

Revised Law

Sec. 9009.362. APPOINTMENT OF RECEIVER. (a) On default or threatened default in the payment of principal of or interest on bonds issued under this subchapter that are payable wholly or partly from revenue, a court may, on petition of the holders of outstanding bonds, appoint a receiver for the authority.

(b) The receiver may collect and receive all authority income except taxes, employ and discharge authority agents and employees, take charge of money on hand, except money received from taxes, unless commingled, and manage the proprietary affairs of the authority without the consent of or hindrance by the board.

(c) The receiver may be authorized to sell or contract for the sale of water or to renew those contracts with the approval of the court that appointed the receiver.

(d) The court may vest the receiver with any other power or duty the court finds necessary to protect the bondholders. (V.A.C.S. Art. 8280-270, Sec. 12(h) (part).)

Source Law

(h) In the event of a default or a threatened default in the payment of principal or of interest on bonds payable wholly or partially from revenues, any court of competent jurisdiction may, upon petition of the holders of outstanding bonds, appoint a receiver with authority to collect and receive all income of the Authority except taxes, employ and discharge agents and employees of the Authority, take charge of funds on hand (except funds received from taxes unless commingled) and manage the proprietary affairs of the Authority without consent or hindrance by the Directors. Such receiver may also be authorized to sell or make contracts for the sale of water or renew such contracts with the approval of the court appointing him. The court may vest the receiver with such other powers and duties as the court may find necessary for the protection of the holders of the bonds. …

Revisor's Note

Section 12(h), V.A.C.S. Article 8280-270, refers to a court "of competent jurisdiction." The revised law omits the quoted language because the general laws of civil jurisdiction determine which courts have "competent jurisdiction" over the matter. For example, see Section 24.303, Government Code, for the jurisdiction of certain district courts to appoint receivers.

Revised Law

Sec. 9009.363. REFUNDING BONDS. (a) The authority may issue refunding bonds to refund outstanding bonds issued under this subchapter and interest on those bonds.

(b) Refunding bonds may:

(1) be issued to refund bonds of more than one series;

(2) combine the pledges for the outstanding bonds for the security of the refunding bonds; or

(3) be secured by a pledge of other or additional revenue or mortgage liens.

(c) The provisions of this subchapter regarding the issuance of other bonds, their security, and the remedies of the holders apply to refunding bonds.

(d) The comptroller shall register the refunding bonds on surrender and cancellation of the bonds to be refunded.

(e) Instead of issuing bonds to be registered on the surrender and cancellation of the bonds to be refunded, the authority, in the resolution authorizing the issuance of the refunding bonds, may provide for the sale of the refunding bonds and the deposit of the proceeds in a bank at which the bonds to be refunded are payable. In that case, the refunding bonds may be issued in an amount sufficient to pay the principal of and interest on the bonds to be refunded to their option date or maturity date, and the comptroller shall register the refunding bonds without the surrender and cancellation of the bonds to be refunded. (V.A.C.S. Art. 8280-270, Sec. 13.)

Source Law

Sec. 13. Authority is authorized to issue refunding bonds for the purpose of refunding any outstanding bonds authorized by this Act and interest thereon. Such refunding bonds may be issued to refund more than one (1) series of outstanding bonds and combine the revenues pledged to the outstanding bonds for the security of refunding bonds, and may be secured by other or additional revenues and mortgage liens. The provisions of this law with reference to the issuance by the Authority of other bonds, their security, and their approval by the Attorney General and the remedies of the holders shall be applicable to refunding bonds. Refunding bonds shall be registered by the Comptroller upon surrender and cancellation of the bonds to be refunded, but in lieu thereof, the resolution authorizing their issuance may provide that they shall be sold and the proceeds thereof deposited in the bank where the original bonds are payable, in which case the refunding bonds may be issued in an amount sufficient to pay the principal of and the interest on the original bonds to their option date or maturity date, and the Comptroller shall register them without concurrent surrender and cancellation of the original bonds.

Revisor's Note

Section 13, V.A.C.S. Article 8280-270, refers to the "approval by the Attorney General" of refunding bonds. The revised law omits the quoted language because it is superseded by Section 1202.003, Government Code, enacted in 1987 as Section 3.002(a), Chapter 53, Acts of the 70th Legislature, 2nd Called Session (Article 717k-8, Vernon's Texas Civil Statutes). That section applies to authority bonds by application of Section 1202.001, Government Code.

Revised Law

Sec. 9009.364. LIMITATION ON RIGHTS OF HOLDERS. The resolution authorizing the bonds or the trust indenture or other instrument securing the bonds may limit or qualify the rights of the holders of less than all of the outstanding bonds payable from the same source to institute or prosecute litigation affecting the authority's property or income. (V.A.C.S. Art. 8280-270, Sec. 12(h) (part).)

Source Law

(h) … The resolution authorizing the issuance of the bonds or the trust indenture or other instrument securing them may limit or qualify the rights of the holders of less than all of the outstanding bonds payable from the same source to institute or prosecute any litigation affecting the Authority's property or income.

Revised Law

Sec. 9009.365. BONDS EXEMPT FROM TAXATION. A bond issued under this subchapter, the transfer of the bond, and income from the bond, including profits made on the sale of the bond, are exempt from taxation in this state. (V.A.C.S. Art. 8280-270, Sec. 20 (part).)

Source Law

Sec. 20. … the bonds issued hereunder and their transfer and the income therefrom, including the profits made on the sale thereof, shall at all times be free from taxation within this state.

Revisor's Note

(End of Subchapter)

(1) Section 12(b), V.A.C.S. Article 8280-270, provides that authority bonds may be sold at a price and under terms that the board determines are the most advantageous reasonably obtainable. The revised law omits that provision because it duplicates or is superseded by provisions of general law. Section 1204.006(b), Government Code, provides that an issuer may sell public securities at any price. Section 1204.006(b) applies to authority bonds by application of Section 1204.001, Government Code. Section 1201.022, Government Code, provides that an issuer may sell public securities "under the terms determined by the governing body of the issuer to be in the issuer's best interests." Section 1201.022 applies to authority bonds by application of Section 1201.002, Government Code. The omitted law reads:

(b) … [The bonds] … may be sold at a price and under terms determined by the Board to be the most advantageous reasonably obtainable, … .

(2) Section 12(b), V.A.C.S. Article 8280-270, provides that authority bonds may bear interest at a rate not to exceed six percent. The revised law omits that provision as impliedly repealed. Section 12(b), V.A.C.S. Article 8280-270, enacted in 1962 by Chapter 12, Acts of the 57th Legislature, 3rd Called Session, was impliedly repealed by the subsequent enactment of Chapter 3, Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes), now Chapter 1204, Government Code. Section 1204.006, Government Code, reflecting the 1981 amendment by Section 1, Chapter 61, Acts of the 67th Legislature, Regular Session, permits a public agency to issue public securities at any net effective interest rate of 15 percent or less. Section 1204.006, Government Code, applies to authority bonds by application of Section 1204.001, Government Code. The omitted law reads:

(b) … provided that no sale shall be made at a price so low as to require the payment of interest on the money received therefor at more than six per cent (6%) per annum, … .

(3) Section 12(b), V.A.C.S. Article 8280-270, provides that authority bonds may be redeemed before maturity at the time and price specified in the resolution authorizing the bonds. The revised law omits that provision because it duplicates Sections 1201.021 and 1201.022, Government Code, which provide that a public security may be redeemed before maturity and be payable in specified amounts and at specified times. Those sections apply to authority bonds by the application of Section 1201.002, Government Code. The omitted law reads:

(b) … and within the discretion of the Board, may be made callable prior to maturity at such times and prices as may be prescribed in the resolution authorizing the bonds, … .

(4) Section 12(b), V.A.C.S. Article 8280-270, provides that authority bonds may be registered as to principal or as to principal and interest. The revised law omits that provision because it duplicates Section 1201.024, Government Code. That section applies to authority bonds by application of Section 1201.002, Government Code. The omitted law reads:

(b) … and may be made registrable as to principal or as to both principal and interest.

(5) Section 16, V.A.C.S. Article 8280-270, requires the authority to deliver bonds it issues to the attorney general for examination and approval. Section 16 also requires the attorney general to approve authority bonds if the bonds were authorized under law. In addition, Section 16 provides that after approval the bonds must be registered with the comptroller and that after approval and registration the bonds are incontestable and constitute binding obligations of the authority. The revised law omits those provisions as superseded by Chapter 1202, Government Code (enacted as Article 3, Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987). Section 1202.003, Government Code, provides for approval of the bonds by the attorney general and requires the attorney general to submit the approved bonds to the comptroller for registration. Section 1202.005, Government Code, requires registration of the bonds by the comptroller. Section 1202.006, Government Code, provides that after approval and registration the bonds are incontestable and binding obligations. Chapter 1202, Government Code, applies to authority bonds by application of Section 1202.001, Government Code. The omitted law reads:

Sec. 16. After any bonds (including refunding bonds) are authorized by the Authority, such bonds and the record relating to their issuance shall be submitted to the Attorney General for his examination as to the validity thereof… . If such bonds have been authorized and … he shall approve the bonds and … the bonds then shall be registered by the Comptroller of Public Accounts. Thereafter the bonds and … shall be valid and binding and shall be incontestable for any cause.

(6) Section 16, V.A.C.S. Article 8280-270, details various procedures regarding approval of bond contracts and proceedings by the attorney general. The revised law omits the portion of Section 16 regarding the validity and incontestability of a contract the proceeds of which are pledged to the payment of a bond as impliedly repealed by Section 1202.006, Government Code (enacted as Section 3.002(d), Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987). Section 1202.006, Government Code, provides that after approval and registration of the bond, the bond and contract are incontestable for any reason. Section 1202.006 applies to authority bonds by application of Section 1202.001, Government Code. The omitted law reads:

Sec. 16. … Where such bonds recite that they are secured by a pledge of the proceeds of a contract theretofore made between the Authority and City or other governmental agency, authority or district, a copy of such contract and the proceedings of the City or other governmental agency, authority or district authorizing such contract may also be submitted to the Attorney General… . if such contracts have been made in accordance with the Constitution and Laws of the State of Texas he shall approve … such contracts and … . Thereafter … the contracts, if any, shall be valid and binding and shall be incontestable for any cause.

(7) Section 19, V.A.C.S. Article 8280-270, lists the entities for which authority bonds are legal and authorized investments. Section 19 also provides that authority bonds may secure deposits of public funds of the state or political subdivisions. The revised law omits the provision because it duplicates, in substance, Section 49.186, Water Code. While Section 19 lists "guardians" and Section 49.186(a), Water Code, does not, the latter statute includes "fiduciaries," and a guardian is a fiduciary. The omitted law reads:

Sec. 19. All bonds of the Authority shall be and are hereby declared to be legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, trustees, guardians, and for the sinking funds of cities, towns, villages, counties, school districts, and other political corporations or subdivisions of the State of Texas. Such bonds shall be eligible to secure the deposit of any and all public funds of the State of Texas, and any and all public funds of cities, towns, villages, counties, school districts, and other political corporations or subdivisions of the State of Texas; and such bonds shall be lawful and sufficient security for said deposits to the extent of their value, when accompanied by all unmatured coupons appurtenant thereto.

Revisor's Note

(End of Chapter)

Section 24, V.A.C.S. Article 8280-270, provides that the act is severable. The revised law omits that provision because it duplicates Section 311.032, Government Code (Code Construction Act), which states that a provision of a statute is severable from each other provision of the statute that can be given effect. The omitted law reads:

Sec. 24. If any provision of this Act or the application thereof to any person or circumstance shall be held to be invalid or unconstitutional, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.


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