CHAPTER 8501. ANGELINA AND NECHES RIVER AUTHORITY
SPECIAL DISTRICT LOCAL LAWS CODE
TITLE 6. WATER AND WASTEWATER
SUBTITLE G. RIVER AUTHORITIES
CHAPTER 8501. ANGELINA AND NECHES RIVER AUTHORITY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 8501.001. DEFINITIONS. In this chapter:
(1) "Authority" means the Angelina and Neches River Authority.
(2) "Board" means the board of directors of the authority.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.002. WATER RIGHTS NOT AFFECTED. This chapter does not
affect any existing rights, or existing priorities in the rights,
to water from the source of supply. The formation of the
authority or a contract for the purchase of water with the
authority is not an abandonment or waiver of those rights or
priorities and is not an abandonment of the original point of
diversion from the source of supply. All those rights existing at
the time of the formation of the authority are preserved.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.003. REGULAR OFFICE OF AUTHORITY. A regular office
shall be established and maintained for conducting authority
business within the authority's territory.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.004. RECORDS. (a) The secretary-treasurer of the
board shall keep a record of all proceedings and all orders of
the board.
(b) The records of the authority are subject to public
inspection.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.005. LIBERAL CONSTRUCTION. This chapter shall be
liberally construed to effectuate its purposes.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
SUBCHAPTER B. NATURE AND TERRITORY
Sec. 8501.051. CREATION AND NATURE OF AUTHORITY. The Angelina
and Neches River Authority is created as a conservation and
reclamation district.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.052. TERRITORY. (a) The authority is composed of the
territory described by Section 3, Chapter 97, General Laws, Acts
of the 44th Legislature, Regular Session, 1935, as amended by the
relevant part of Section 1, Chapter 394, Acts of the 65th
Legislature, Regular Session, 1977.
(b) The authority's territory also may have been modified under
other law.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
SUBCHAPTER C. BOARD OF DIRECTORS AND EMPLOYEES
Sec. 8501.101. MEMBERSHIP OF BOARD. (a) The board consists of
nine directors appointed by the governor with the advice and
consent of the senate.
(b) Each director must be a freehold property taxpayer and a
qualified voter of the state.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.102. TERMS. Directors are appointed for staggered
terms of six years with one-third of the directors' terms
expiring every two years.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.103. VACANCY. (a) A vacancy on the board shall be
filled by appointment by the governor with the advice and consent
of the senate.
(b) A person appointed to a vacant position serves for the
unexpired part of the term.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.104. OATH AND BOND REQUIREMENT FOR DIRECTOR. (a) A
director shall, within 15 days after the date of appointment,
qualify by taking the constitutional oath of office and by filing
a good and sufficient bond with the secretary of state.
(b) The bond is subject to approval by the secretary of state
and must:
(1) be in the amount of $1,000;
(2) be payable to the authority; and
(3) be conditioned on the faithful performance of the duties as
a director.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.105. COMPENSATION OF DIRECTORS. Unless the board by
resolution increases the fee of office to an amount authorized by
Section 49.060, Water Code, a director shall receive as a fee of
office an amount not to exceed $10 for each day of service
necessary to discharge the director's duties, if the board votes
to authorize the service.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.106. QUORUM RELATING TO CONSTRUCTION MATTERS. The
concurrence of five directors is required for entering into a
construction contract or for authorizing the issuance of a
warrant to pay for a construction contract.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.107. OFFICERS. (a) The board shall elect one of the
directors as president of the board, one as vice president, and
one as secretary-treasurer.
(b) The president is the chief executive officer of the
authority.
(c) The vice president shall act as president if the president
is absent or disabled.
(d) The secretary-treasurer shall act as a secretary of the
board. The board shall select a secretary pro tem if the
secretary-treasurer is absent or unable to act.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.108. MEETINGS. (a) The president shall preside at
all meetings of the board.
(b) The board shall set, by order entered in the minutes of its
proceedings, a specified time for the regular meetings of the
board. The board shall meet for a specific occasion if called by
order of the president, vice president, or a majority of the
directors.
(c) The board shall hold its meetings at its office and
principal place of business unless the board directs otherwise
for a specific occasion.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.109. EMPLOYMENT PREFERENCE. (a) The authority and
each contractor who employs labor for the construction of an
improvement for the authority shall give a preference to the
employment of:
(1) persons who are on relief rolls or otherwise unemployed and
who are able to efficiently provide the proper service in the
various classifications of labor under which they are to be
employed; and
(2) if there are not sufficient persons who are qualified under
Subdivision (1), qualified workers who reside in the locality
where the improvement is to be constructed.
(b) The persons to whom the preference applies include persons
required for office or clerical work but do not include the key
workers of the authority or contractor.
(c) Each contract expressly entered into under this chapter by
the authority with a contractor must expressly impose on the
contractor the duty to give the preference provided by this
section.
(d) To the extent this section conflicts with the requirements
of a federal agency providing funds for the authority, the
requirements of the federal agency control.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.110. REMOVAL OF EMPLOYEE. An employee of the
authority may be removed by the board.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.111. COMPENSATION OF EMPLOYEES. The board shall set
the reasonable compensation to be paid to the general manager and
other employees of the authority.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.112. DIRECTOR'S, OFFICER'S, OR EMPLOYEE'S SURETY BOND.
A bond required to be given by a director, officer, or employee
of the authority must be executed by a surety company authorized
to do business in this state, as surety on the bond.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.113. CONFLICT OF INTEREST; CRIMINAL PENALTY. (a) A
director or an engineer or employee of the authority may not be
directly or indirectly interested, personally or as an agent for
another person, in a contract for the purchase or construction of
any work by the authority.
(b) A person commits an offense if the person violates this
section. An offense under this subsection is a misdemeanor
punishable by a fine not to exceed $1,000, by confinement in the
county jail for not less than six months or more than one year,
or by both the fine and confinement.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
SUBCHAPTER D. POWERS AND DUTIES
Sec. 8501.151. POWERS UNDER CONSTITUTION AND OTHER LAW. The
authority has the powers of a conservation and reclamation
district under the constitution and other laws of this state,
including the powers:
(1) expressly authorized in Section 59, Article XVI, Texas
Constitution, for a district created to conserve, store, control,
preserve, use, and distribute the storm water and floodwater and
the water of the rivers and streams of the state;
(2) implied by the purposes of that section of the constitution;
and
(3) given by general law.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.152. APPLICABILITY OF WATER CODE. The rights, powers,
privileges, and functions granted to the authority, and the
authority itself, are expressly subject to Chapters 11, 12, 26,
and 49, Water Code, as applicable.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.153. STATE SUPERVISION AND APPROVAL. (a) The Texas
Commission on Environmental Quality shall consider the adequacy
of, and decide whether to approve, any flood control or
conservation improvement plan that:
(1) is devised by the authority to achieve a plan or purpose for
which the authority is created; and
(2) contemplates improvements that are to be supervised by the
commission under general law.
(b) Before the authority establishes a diversion point or
constructs a canal, pumping plant, or other work under this
chapter, the authority must:
(1) present the plans and specifications for the project to the
Texas Commission on Environmental Quality; and
(2) obtain the approval of the commission.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.154. GENERAL POWERS RELATING TO WATER. (a) The
authority has the rights and powers of an independent
conservation and reclamation district to construct, maintain, and
operate in the valleys of the Neches River and its tributaries,
inside or outside the authority, any work considered essential:
(1) to the operation of the authority; and
(2) for the authority's administration in the control, storage,
preservation, and distribution to all useful purposes of the
water, including storm water and floodwater, of the Neches River
and its tributaries.
(b) The authority has the same power of control and regulation
over the waters of the Neches River and its tributaries that the
state has, subject to the constitution and statutes of this
state.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.155. POWERS RELATING TO PARTICULAR PURPOSES. For the
conservation and beneficial use of the water of the Neches River
and its tributaries, including storm water and floodwater, the
authority may control and use the water in the manner and for a
particular purpose described by Section 8501.156, 8501.157,
8501.158, 8501.159, 8501.160, or 8501.161.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.156. POWERS RELATING TO FLOODING. In acting under
Section 8501.155, the authority may:
(1) prevent the devastation of land from recurrent overflows;
(2) protect life and property in the authority from uncontrolled
floodwater; and
(3) encourage the conservation of soil to prevent destructive
erosion and to prevent the increased flood menace related to that
erosion.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.157. POWERS RELATING TO USE OF WATER IN GENERAL. In
acting under Section 8501.155, the authority may:
(1) through practical means, provide for the control and
coordination of the regulation of the water of the Neches River
and its tributaries;
(2) by adequate organization and administration, provide for
preserving the equitable rights of the people of different
sections of the watershed area in the beneficial use of the water
of the Neches River and its tributaries;
(3) store, control, and conserve the water of the Neches River
and its tributaries inside or outside the authority and prevent
the escape of that water without the maximum of public service;
(4) equitably distribute the water of the Neches River and its
tributaries to meet the regional potential requirements for all
uses, including domestic, manufacturing, and irrigation uses; and
(5) use controlled and conserved floodwater and storm water for
any purpose that results in the performance of a useful service
authorized by the constitution of this state.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.158. POWERS RELATING TO DOMESTIC, COMMERCIAL, OR
INDUSTRIAL USE OF WATER. In acting under Section 8501.155, the
authority may:
(1) conserve the water of the Neches River and its tributaries
essential for the domestic uses of the people of the authority,
including all necessary water supplies for cities and towns;
(2) control the water of the Neches River and its tributaries
and make the water available for use in the development of
commercial and industrial enterprises in the entire watershed
area of the authority; and
(3) control, store, and use the water of the Neches River and
its tributaries in the development and distribution of
hydroelectric power, if that use is economically coordinated with
other superior uses and subordinated to the uses declared by law
to be superior.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.159. POWERS RELATING TO USE OF WATER FOR IRRIGATION.
In acting under Section 8501.155, the authority may provide for
the irrigation of all land in the authority or land outside the
authority but inside the authority's watershed area where the
irrigation is required for agricultural purposes or is considered
helpful to more profitable agricultural production.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.160. POWERS RELATING TO DRAINAGE OF WATER. In acting
under Section 8501.155, the authority may:
(1) provide for the better encouragement and development of
drainage systems for, and provide for the drainage of, lands in
the valleys of the Neches River and its tributaries as needed for
profitable agricultural production; and
(2) provide for drainage for other land in the watershed area of
the authority as required for the most advantageous use of the
land.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.161. POWERS RELATING TO ACQUISITION OR OPERATION OF
WORKS, LAND, OR OTHER PROPERTY. (a) In acting under Section
8501.155, the authority may:
(1) purchase or construct any work necessary or convenient for
the exercise of the authority's powers under this chapter and to
accomplish the purposes of this chapter; and
(2) purchase or otherwise acquire land or other property
necessary or convenient for carrying out the purposes of this
chapter.
(b) The plans and works provided by the authority, and the works
provided under the power of the authority, shall regard primarily
the necessary and potential needs for water by or within the area
in the authority constituting the watershed of the Neches River
and its tributaries.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.162. ADDITIONAL POWERS RELATING TO ACQUISITION OR
OPERATION OF PROPERTY. (a) In this section, "property" includes
a right, including a water right, and includes land and a
tenement, easement, improvement, reservoir, dam, canal, lateral,
plant, work, and facility.
(b) The authority may investigate, plan, acquire, construct,
maintain, or operate any property the authority considers
necessary or proper for the accomplishment of the purposes of the
authority.
(c) The power described by Subsection (b) includes the power to
acquire property inside or outside the authority that is
incidental or helpful to carrying out the authority's purposes
under this chapter.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.163. POWERS RELATING TO CONTRACT, LEASE, AGREEMENT, OR
CONVEYANCE. (a) The authority may enter into a contract, lease,
or other agreement necessary or convenient to carry out a power
given to the authority by this chapter.
(b) The authority may enter into the contract, lease, or
agreement with any person, including:
(1) an individual or artificial entity;
(2) a corporation, including a municipal corporation and a
public or private corporation; and
(3) a government or governmental agency, including the United
States and this state.
(c) The authority may:
(1) convey or cause to be conveyed any of its property to the
United States; and
(2) enter into a lease, regardless of whether it includes a
privilege of purchase, with the United States relating to any
property and obligate the authority to pay rent under the lease
from the income or other revenue of the property.
(d) A contract, lease, or agreement under this section must be
approved by resolution of the board and must be executed by the
president and attested by the secretary-treasurer.
(e) This section does not authorize the assumption by the
authority of any obligation requiring a payment from taxes.
(f) The property to which Subsection (c) applies includes a
right, land, tenement, easement, improvement, reservoir, dam,
canal, plant, lateral, work, and facility.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.164. RIGHT OF EMINENT DOMAIN. (a) The authority may
exercise the power of eminent domain to acquire fee simple title
to, or an easement over or through, any land, water, or land
under water that is necessary or convenient for carrying out any
purpose or power given to the authority by this chapter. The
power applies to private or public property inside or outside the
authority.
(b) A condemnation proceeding is under the direction of the
board and must be in the name of the authority.
(c) The assessment of damages and all procedures related to
condemnation, appeal, and payment must conform to Chapter 21,
Property Code.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.165. COORDINATION AND JOINT UNDERTAKINGS AMONG
DISTRICTS. (a) A drainage, conservation, reclamation, or other
district created by this state with powers provided in Section
59, Article XVI, Texas Constitution, may:
(1) coordinate its plans with the authority; and
(2) enter into joint undertakings with the authority for the
purposes for which the entities are created.
(b) The acts taken under Subsection (a) must be approved by a
majority of the boards of directors of all the districts
involved.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.166. NO AUTHORITY FOR TAX OR SPECIAL ASSESSMENT. This
chapter does not authorize the authority to impose a tax or
special assessment or to create any debt payable from taxes.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
SUBCHAPTER E. GENERAL FINANCIAL MATTERS
Sec. 8501.201. PROCEDURE FOR PAYMENT. A warrant for the payment
of money by the authority may be drawn and signed by the
president and the secretary-treasurer if the account under which
the payment is to be made results from a contract made by the
board and is ordered paid by the board.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.202. RECORDS RELATING TO MONEY. The
secretary-treasurer shall:
(1) receive and give a receipt for all money received by the
authority; and
(2) keep records of all money received and spent by the
authority.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.203. FILING OF AUDIT. In addition to copies of the
annual audit of the authority that are filed as required by
Section 49.194, Water Code, a copy shall be filed with the
depository of the authority and the office of the auditor.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.204. FEES. (a) The board shall prescribe fees to be
collected for:
(1) the use of water;
(2) a water connection; or
(3) another service.
(b) The board shall set the fees in amounts that are reasonable
and equitable and sufficient to produce revenue adequate to pay
the items described by Subsection (c). The fees may not exceed
what may be reasonably necessary to fulfill the obligations
imposed on the authority by this chapter.
(c) The board shall pay the following items from the fees:
(1) all expenses necessary to the operation and maintenance of
the improvements and facilities of the authority, including:
(A) the cost of the acquisition of materials and other property
necessary to maintain the improvements and facilities in good
condition and to operate them efficiently;
(B) necessary wages and salaries of the authority; and
(C) other expenses reasonably necessary to the efficient
operation of the improvements and facilities;
(2) the interest on any obligation issued under this chapter and
payable from the revenue from the improvements and facilities;
and
(3) the amount required to be paid annually into the sinking
fund for the payment of an obligation issued under this chapter
and payable from the revenue of the improvements and facilities.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.205. LIMITATION ON USE OF REVENUE. (a) A charge on
the revenue derived from the improvements and facilities of the
authority may not be made if the principal or interest of any
obligation issued under this chapter is unpaid.
(b) If the revenue derived from the improvements and facilities
of the authority exceed the amount required for the payment of
items under Section 8501.204(c), the board may pay the cost of
improvements and replacements not covered by Section
8501.204(c)(1) and may establish a reasonable depreciation and
emergency fund.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
SUBCHAPTER F. OBLIGATIONS RELATING TO BORROWED MONEY
Sec. 8501.251. POWER TO BORROW MONEY; EVIDENCE OF OBLIGATION.
The authority may:
(1) borrow money from any source, including an agency of the
United States; and
(2) issue a note, warrant, certificate of indebtedness, or other
form of obligation of the authority as evidence of the borrowed
money.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.252. OBLIGATION PAYABLE FROM REVENUE. (a) An
obligation issued under this chapter by the authority may be made
payable from and secured by a pledge of:
(1) all the revenue derived from the operations and devices of
the authority's improvements and facilities, excluding any
revenue derived from a tax or assessment;
(2) only the revenue derived from the operation of the
authority's improvements and facilities acquired with the
proceeds from the sale of the obligation; or
(3) a specific part of the revenue derived from the operation of
the authority's improvements and facilities.
(b) The proceedings authorizing the issuance of the obligation
must identify the method described by Subsection (a) that is to
be used to pay and secure the obligation.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.253. NO CREATION OF DEBT; NO PAYMENT FROM TAXES. (a)
An obligation issued under this chapter is not a debt or a pledge
of credit of the authority.
(b) The obligation:
(1) may not be paid in whole or part from any money raised by
taxation; and
(2) must contain a recital to that effect.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.254. TIME OF SALE. An obligation issued under this
chapter shall be sold at the time determined by the board to be
expedient and necessary to the interest of the authority.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.255. MATURITY. An obligation issued under this
chapter must mature not more than 50 years after its date in the
manner provided by the board.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.256. SIGNATURES. (a) An obligation issued under this
chapter must be signed by the president and secretary-treasurer
of the board. An interest coupon attached to an obligation may be
executed with the facsimile signature of the president and
secretary-treasurer.
(b) If an officer whose signature is on an obligation or coupon
ceases to be an officer before the delivery of the obligation to
the purchaser, the signature remains valid for all purposes.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.257. LIEN ON REVENUE. (a) If more than one series of
obligations is issued under this chapter payable from and secured
by identical revenue, the priority of a lien against that revenue
depends on the time of delivery of the obligations. A lien for a
series of obligations is prior and superior to a lien for another
series of obligations subsequently delivered.
(b) For an issue or series of obligations that are authorized as
a unit but delivered periodically in blocks, the board may, in
the proceedings authorizing the issuance of the obligations,
provide that all the obligations of the issue or series are
coequal as to lien regardless of the time of delivery.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.258. SINKING FUND: IN GENERAL. (a) A resolution or
order authorizing the issuance of obligations under this chapter
must provide for the creation of a sinking fund. Amounts
sufficient to pay the principal of and interest on the
obligations shall be paid into the fund from the revenue pledged
to the payment of the obligations. The payments into the fund
shall be made monthly as the revenue is collected.
(b) In the manner provided by this chapter, the money in the
sinking fund shall be applied, at or before maturity of the
obligations, solely to:
(1) the payment of interest on the obligations for the payment
of which the fund is created; and
(2) the retirement of the obligations.
(c) A resolution or order authorizing the issuance of
obligations under this chapter must provide that the revenue from
which the obligations are to be paid and that is pledged to the
payment of the obligations shall be:
(1) set apart and paid into the sinking fund monthly as the
revenue accrues and is received; and
(2) disbursed in the manner provided by this chapter.
(d) In determining the amount of revenue to be set apart, the
board shall provide that the amount to be set apart and paid into
the sinking fund in any year shall be not less than a fixed
amount. The fixed amount must be at least sufficient to:
(1) provide for the payment of the principal of and interest on
all obligations maturing and becoming payable in the year; and
(2) create a surplus or margin of 10 percent in excess of the
amount needed under Subdivision (1).
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.259. SINKING FUND: EXCESS MONEY. (a) At the time
obligations are authorized under this chapter, the board may
provide that all money in the sinking fund in excess of the
amount required for the payment of the principal of and interest
on the outstanding obligations, for a period the board
determines, shall be spent once each year under the board's order
to purchase obligations for the account of which the sinking fund
has been accumulated, if the obligations can be purchased at a
price the board considers reasonable.
(b) The board may provide that, if the obligations contain an
option permitting retirement before maturity, the excess amount
shall be paid out as provided by this chapter for the purchase of
the obligations. If the board is unable to purchase sufficient
obligations of the issue to absorb all the surplus, the board
shall call for redemption of a sufficient amount of the
obligations to absorb, so far as practicable, the entire surplus
remaining in the sinking fund.
(c) The board may provide that any excess amount in the sinking
fund that cannot be applied to the purchase or redemption of
obligations shall remain in the sinking fund to be used for
payment of principal or interest, when due, or for the subsequent
call of obligations for purchase or redemption in the manner
provided by this section.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.260. COVENANTS FOR MARKETABILITY. (a) A resolution
or order authorizing the issuance of obligations under this
chapter may contain covenants with the holders of the obligations
on the following subjects as considered necessary to ensure the
marketability of the obligations:
(1) management and operation of the improvements and facilities
of the authority;
(2) collection of fees for the use of the improvements and
facilities;
(3) disposition of the fees;
(4) issuance of future obligations and creation of future liens,
mortgages, and encumbrances against the improvements and
facilities and the revenue of the improvements and facilities;
and
(5) other pertinent matters.
(b) The covenants may not be inconsistent with this chapter.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.261. HOLDER OF OBLIGATION MAY COMPEL PERFORMANCE. (a)
A holder of obligations issued under this chapter or of coupons
originally attached to the obligations may enforce and compel the
performance by the board of all duties required of the board by
this chapter, including:
(1) setting and collecting reasonable and sufficient fees for
the use of the improvements and facilities of the authority;
(2) segregating the income and revenue of the improvements and
facilities; and
(3) applying the income and revenue under this chapter.
(b) The holder of the obligations or coupons may act under
Subsection (a):
(1) at law or in equity; and
(2) by a suit, action, mandamus, or other proceeding.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.262. HOLDER OF OBLIGATION ENTITLED TO ADMINISTRATOR OR
RECEIVER. (a) If there is a default in the payment of the
principal of or interest on an obligation issued under this
chapter, any holder of the obligation is entitled to have an
administrator or receiver appointed by a court to administer and
operate, on behalf of the authority and the holders of the
obligation, the improvements and facilities the revenue of which
is pledged to the payment of the obligation.
(b) The administrator or receiver may:
(1) set and collect fees sufficient to:
(A) provide for the payment of operation and maintenance
expenses as described by this chapter; and
(B) pay any outstanding obligations or interest coupons payable
from the revenue of the improvements and facilities; and
(2) apply the income and revenue of the improvements and
facilities in accordance with this chapter and the proceedings
authorizing the issuance of the obligation.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.263. ADDITIONAL SECURITY FOR OBLIGATION: MORTGAGE AND
ENCUMBRANCE. (a) As additional security for the payment of an
obligation issued under this chapter, the board may have executed
in favor of the holders of the obligations an indenture
mortgaging and encumbering:
(1) the improvements, facilities, and other property acquired
with the proceeds of the sale of the obligation; or
(2) all the improvements, facilities, and other property of the
authority.
(b) In the encumbrance, the board may provide for granting to
any purchaser at a foreclosure sale under the encumbrance a
franchise to operate the improvements, facilities, and other
property for a term not to exceed 50 years after the date of the
purchase, subject to the laws regulating the matter.
(c) The indenture:
(1) may contain the provisions the board considers proper; and
(2) is enforceable in the manner provided by the laws of this
state for the enforcement of other mortgages and encumbrances.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.264. SALE UNDER MORTGAGE OR ENCUMBRANCE. (a) Under a
sale ordered under a mortgage or encumbrance described by Section
8501.263, a purchaser of the improvements, facilities, and other
property at the sale, and the purchaser's successors or assigns,
are vested with a permit and franchise to maintain and operate
the improvements, facilities, and other property with powers and
privileges like those held by the authority in the operation of
the improvements, facilities, and other property.
(b) Instead of operating the improvements, facilities, and other
property as provided by Subsection (a), the purchaser and the
purchaser's successors or assigns may remove all or part of the
improvements, facilities, and other property for diversion to
other purposes.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.265. STATE FRANCHISE LAW NOT APPLICABLE. A statute of
this state relating to the granting of franchises is not
applicable to:
(1) the authorization or execution of a mortgage or encumbrance
entered into under this chapter; or
(2) the grant of a franchise under this chapter.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.266. DEPOSIT OF PROCEEDS. (a) The proceeds of the
sale of an obligation issued under this chapter may be:
(1) deposited in one or more banks on which the purchaser of the
obligations and the board agree; and
(2) deposited and paid out under the conditions and other terms
to which the purchaser and board agree.
(b) The statutes of this state relating to the deposit of
authority funds in the depository of the authority do not apply
to the deposit of the proceeds of the sale of an obligation
issued under this chapter.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.267. USE OF UNSPENT PROCEEDS AFTER PROJECT COMPLETION.
Any part of the proceeds of the sale of an obligation issued
under this chapter that are unspent after the project for which
the obligations were authorized is completed may be paid into the
sinking fund for the payment of the obligation and may be used
only for:
(1) the payment of the principal of the obligation; or
(2) the purpose of acquiring outstanding obligations by purchase
in the manner provided by this chapter.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.268. INSURING IMPROVEMENTS AND FACILITIES. (a) The
board may enter into, under terms to which the board agrees, an
agreement with the purchaser of an obligation issued under this
chapter to:
(1) keep all the improvements and facilities, the revenue of
which is pledged to the payment of the obligation, insured with
insurers of good standing against loss or damage by fire, water
or flood, or another hazard that private companies that operate
similar property customarily cover by insurance; and
(2) carry with one or more insurers of good standing the
insurance covering the use and occupancy of the property as is
customarily carried by private companies that operate similar
property.
(b) The cost of the insurance shall be budgeted as a maintenance
and operation expense.
(c) The insurance shall be carried for the benefit of the holder
of the obligation.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.269. REFUNDING OBLIGATION. (a) The authority may
authorize and issue, on terms the board considers advisable, a
refunding obligation to provide for the retirement of an
outstanding obligation issued by the authority under this
chapter. The refunding obligation:
(1) may be issued for an obligation that is due or to become
due; and
(2) is subject to the provisions of this chapter relating to the
issuance of other obligations.
(b) A refunding obligation may be:
(1) exchanged for like par amounts of the outstanding
obligation; or
(2) sold, with the proceeds being used to retire the outstanding
obligation.
(c) The refunding obligation must be:
(1) secured in all respects to the same extent as other
obligations issued under this chapter; and
(2) paid from the same revenue from which the refunded
obligation was to be paid.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
Sec. 8501.270. TAX EXEMPTION. An obligation issued under this
chapter is exempt from taxation by this state or by any municipal
corporation, county, or other political subdivision or taxing
district of this state.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.
SUBCHAPTER Z. MISCELLANEOUS PROVISIONS
Sec. 8501.901. CHAPTER AS FULL AUTHORITY; OTHER STATUTES NOT
APPLICABLE. (a) This chapter, without reference to other
statutes of this state, is full authority for the authorization
and issuance of an obligation under this chapter and for the
accomplishment of all actions authorized by this chapter. No
other proceedings are necessary.
(b) A statute of this state does not apply to a proceeding or
other act under this chapter if the statute:
(1) relates to:
(A) the authorization or issuance of obligations;
(B) the operation or maintenance of an improvement or facility;
(C) the grant of a franchise or permit; or
(D) the right to an election or referendum petition; or
(2) in any way impedes or restricts the implementation of the
acts authorized under this chapter.
(c) Notwithstanding Subsections (a) and (b), this section does
not prevent another statute from applying to the authority if the
legislative intent is that the other statute supersede or operate
in conjunction with this chapter.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.