CHAPTER 8503. LOWER COLORADO RIVER AUTHORITY
SPECIAL DISTRICT LOCAL LAWS CODE
TITLE 6. WATER AND WASTEWATER
SUBTITLE G. RIVER AUTHORITIES
CHAPTER 8503. LOWER COLORADO RIVER AUTHORITY
Sec. 8503.001. CREATION. (a) A conservation and reclamation
district to be known as the "Lower Colorado River Authority" is
created. The authority is a governmental agency and a body
politic and corporate.
(b) The authority is created under and is essential to
accomplish the purposes of Section 59, Article XVI, Texas
Constitution, including the control, storing, preservation, and
distribution of the waters of the Colorado River and its
tributaries within the boundaries of the authority for
irrigation, generation of electric energy and power, and other
useful purposes; the reclamation and irrigation of arid,
semiarid, and other lands needing irrigation; the development of
parks on lands owned or acquired by the authority; and the
conservation and development of the forests, water, and electric
power in this state.
(c) Nothing in this chapter or in any other law shall be
construed as authorizing the authority to levy or collect taxes
or to create any indebtedness payable out of taxes or in any way
to pledge the credit of this state.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.001 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.002. DEFINITIONS. In this chapter:
(1) "Authority" means the Lower Colorado River Authority.
(2) "Board" means the board of directors of the authority.
(2-a) "Commission" means the Texas Commission on Environmental
Quality.
(3) "Director" means a member of the board.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.002 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(f), eff. September 1, 2007.
Sec. 8503.003. TERRITORY. The authority consists of the
territory included within the boundaries of the counties of
Blanco, Burnet, Llano, Travis, Bastrop, Fayette, Colorado,
Wharton, San Saba, and Matagorda.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.003 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.004. POWERS AND DUTIES. (a) Except as expressly
limited by this chapter, the authority has all the powers,
rights, privileges, and functions conferred by general law on any
district or districts created under Section 59, Article XVI,
Texas Constitution.
(b) The authority may control, store, and preserve, within the
boundaries of the authority, the waters of the Colorado River and
its tributaries and the lands of the authority for any useful
purpose and may use, distribute, and sell those waters, within
the boundaries of the authority or within the boundaries of the
watershed that contributes inflow to the Colorado River below the
intersection of Coleman, Brown, and McCulloch counties, for any
such purpose.
(c) The authority may develop and generate water power and
electric energy within the boundaries of the authority and may
distribute and sell water power and electric energy, within or
outside the boundaries of the authority.
(d) Within the boundaries of the authority, the authority may
prevent or aid in the prevention of damage to person or property
from the waters of the Colorado River and its tributaries.
(e) Within the boundaries of the authority, the authority may
forest and reforest and aid in the foresting and reforesting of
the watershed area of the Colorado River and its tributaries, and
the authority may prevent and aid in the prevention of soil
erosion and floods within the watershed area.
(f) The authority may acquire by purchase, lease, or gift or in
any other manner provided by law and may maintain, use, and
operate property of any kind, real, personal, or mixed, or any
interest in property, within or outside the boundaries of the
authority that is necessary or convenient to the exercise of the
powers, rights, privileges, and functions conferred on the
authority by this chapter.
(g) The authority may acquire by condemnation property of any
kind, real, personal, or mixed, or any interest in property,
within or outside the boundaries of the authority, other than
property or an interest in property outside the boundaries of the
authority owned by a body politic, that is necessary or
convenient to the exercise of the powers, rights, privileges, and
functions conferred on the authority by this chapter. The
authority shall exercise the condemnation power in the manner
provided by general law with respect to condemnation or, at the
option of the authority, in the manner provided by state law
relating to condemnation by districts organized under general law
under Section 59, Article XVI, Texas Constitution.
(h) Subject to the provisions of this chapter, the authority may
sell or otherwise dispose of property of any kind, real,
personal, or mixed, or any interest in the property, that is not
necessary to the conduct of the business of the authority.
(i) The authority may overflow and inundate within the
boundaries of the authority any public lands and public property
and may require the relocation of roads, pipelines, transmission
lines, railroads, cemeteries, and highways in the manner and to
the extent permitted to districts organized under general law
under Section 59, Article XVI, Texas Constitution.
(j) The authority may construct, extend, improve, maintain, and
reconstruct, cause to be constructed, extended, improved,
maintained, and reconstructed, and use and operate facilities of
any kind necessary or convenient to the exercise of its powers,
rights, privileges, and functions.
(k) The authority may sue and be sued in its corporate name.
(l) The authority may adopt and use a corporate seal.
(m) The authority may make bylaws for the management and
regulation of its affairs.
(n) The authority may appoint officers, agents, and employees,
prescribe their duties, and set their compensation.
(o) The authority may make contracts and execute instruments
necessary or convenient to the exercise of the powers, rights,
privileges, and functions conferred on the authority by this
chapter or permitted by general law.
(p) The authority may borrow money for its corporate purposes on
notes or other written evidence of indebtedness for a period not
to exceed five years as may be authorized from time to time by an
affirmative vote of 12 members of the board and repay the loans
or indebtedness from the proceeds of bonds of the authority at
the next bond offering. The authority may borrow money and
accept grants from the United States, this state, or any
corporation or agency created or designated by the United States
or this state and, in connection with the loan or grant, may
enter into an agreement that the United States, this state, or
the corporation or agency requires. The authority may make and
issue negotiable bonds for money borrowed in the manner provided
by Sections 8503.013 and 8503.014 or other general law. This
chapter does not authorize the issuance of any bonds, notes, or
other evidences of indebtedness of the authority except as
specifically provided by this chapter or other general law.
(q) The authority may provide for the study, correcting, and
control of both artificial and natural pollution, including
organic, inorganic, and thermal, of all groundwater or surface
water of the Colorado River and its tributaries within the
boundaries of the authority. The authority may adopt by
ordinance rules with regard to the pollution, both artificial and
natural, and possesses police power to enforce its rules. The
authority may provide a reasonable penalty for the violation of
any rule. The penalty is cumulative of any penalties fixed by
the general law of this state. A penalty under this subsection
may not exceed the limit for penalties provided by Section
49.004, Water Code. An ordinance enacted under this section may
not be adopted in any county or counties outside the existing
boundaries of the authority.
(r) As a necessary aid to the conservation, control,
preservation, purification, and distribution of surface waters
and groundwater of the Colorado River and its tributaries within
the boundaries of the authority, the authority may construct,
own, operate, maintain, or otherwise provide sewage gathering,
treatment, and disposal services, including waste disposal
services, and may make contracts regarding those services with
the United States, this state, counties, municipalities, and
others. The authority shall charge the actual cost of those
services.
(s) The authority may develop and manage parks, recreational
facilities, and natural science laboratories and may promote the
preservation of fish and wildlife within the boundaries of the
authority. The authority may negotiate contracts with any county,
municipality, municipal corporation, person, firm, corporation,
nonprofit organization, or state or federal agency for the
operation and maintenance of any such park, recreational
facility, or natural science laboratory. The preservation of fish
and wildlife shall be in accordance with the rules of the Parks
and Wildlife Commission. Notwithstanding any other provisions of
this chapter, the board may charge and collect reasonable
entrance, gate, or use fees for the development, management, and
use of parks and recreational facilities developed in whole or in
part by the authority.
(t) The authority may enter into agreements authorized by
Chapter 163, Utilities Code, to acquire, install, construct,
operate, enlarge and make additions to, and own and operate
electric power and energy generating facilities as provided by
that chapter, in joint ownership with others, either as cotenants
or under any other arrangements that are approved by a
three-fourths vote of the statutory membership of the board. In
accordance with and subject to the terms of the agreements, if
any, the authority may sell or otherwise dispose of any or all of
its interest in the jointly owned electric power and generating
facilities. This subsection does not apply to generating
facilities or other property wholly owned by the authority.
(u) The authority may do any and all other acts or things
necessary or convenient, including controlling the use of the
surface of a lake or island located in the lake developed by the
authority and levying a charge for the commercial use of the lake
or island, to the exercise of all powers, rights, privileges,
authority, or functions conferred on the authority by the
constitution, this chapter, or any law.
(v) The authority may enter into contracts with this state
through the comptroller providing for direct sale by the
authority of electrical power to this state for use in buildings
or other facilities owned, leased, or rented by this state in
Travis County.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.004 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(g), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
937, Sec. 1.116, eff. September 1, 2007.
Sec. 8503.005. LIMITATIONS OF AUTHORITY. (a) The authority may
not use for irrigation purposes any water under any permit or
permits acquired from any other company or person unless the use
is expressly authorized and granted to the authority by the
commission or its predecessor agency under authority of law. In
considering subsequent applications by the authority, the
commission shall at all times consider the needs of the people
living within and on lands lying within the watershed of the
Colorado River and its tributaries above the authority.
(b) Notwithstanding any rights or permits issued by the
commission or its predecessor agency that are held or acquired by
the authority, the impounding and use of the floodwaters of the
Colorado River or its tributaries for the generation of
hydroelectric power by the authority or anyone who may succeed to
the rights and privileges conferred on the authority by this
chapter are subject to the rights of a person, municipal
corporation, or body politic that, under legal grant of
authority, is impounding and putting to beneficial use the waters
if the person, municipal corporation, or body politic:
(1) has received a permit for the use from the commission, or
its predecessor agency; or
(2) is permitted by law to impound water for the purposes
described by this subsection.
(c) Nothing in this chapter shall be construed to require a
municipal corporation or body politic to surrender to the
authority any rights described by this section to which it may be
legally entitled.
(d) This chapter may not be construed to subject to condemnation
by the authority or any successor, or by anyone who may succeed
to the rights and privileges conferred on the authority by this
chapter, any waters:
(1) impounded or to be impounded within or outside the authority
under any law authorizing water to be impounded or under any
permits granted to a municipal corporation or body politic; or
(2) impounded or permitted to be impounded or used outside the
authority under permits legally granted to any person.
(e) Nothing in this chapter shall be construed as depriving any
person or municipality of the right, legally granted, to impound
the waters of the Colorado River or its tributaries for
authorized beneficial uses or as repealing any law granting those
rights to persons and municipalities.
(f) The rights of the authority to impound or use or sell the
waters of the Colorado River and its tributaries for the
generation of hydroelectric power are subordinate and inferior to
the rights of:
(1) municipalities situated within the boundaries of the
authority to build dams and impound floodwaters solely for
municipal purposes;
(2) municipalities and bodies politic within the watershed of
the Colorado River outside the authority to build dams or impound
floodwaters for municipal purposes; and
(3) bodies politic within the watershed of the Colorado River to
build dams and impound the floodwaters within the watershed of
the Colorado River and its tributaries for domestic purposes
inside and outside the boundaries of the authority.
(g) The title to any rights, properties, licenses, franchises,
or permits acquired by the authority shall be subject to the
limitations imposed by Subsection (f).
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.005 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.006. BOARD OF DIRECTORS. (a) The powers, rights,
privileges, and functions of the authority shall be exercised by
the board. The board shall consist of 15 directors and shall
include at least one director from each of the counties named in
Section 8503.003 except Travis County, which shall have two
directors. Three directors shall be appointed at large from the
counties served with electric power, other than the counties
included in Section 8503.003.
(b) A director appointed at large may not serve for a period of
more than six consecutive years. A county other than a county
included in Section 8503.003 may not be represented on the board
for more than six consecutive years. A county other than Travis
County may not have two directors for a period greater than six
consecutive years.
(c) All directors shall be appointed by the governor with the
advice and consent of the senate for staggered terms of six
years, with five members' terms expiring on February 1 of each
odd-numbered year.
(d) Each director must be a resident and freehold property
taxpayer of the county from which the director is appointed and
must have been a resident and taxpayer of that county for not
less than the two years preceding the director's appointment. Not
more than two directors may be residents of the same county.
(e) A person is not eligible for appointment as a director if
the person has, during the three years preceding the person's
appointment, been employed by an electric power and light
company, a telephone company, or any other utility company.
(f) At the expiration of the term of a director, a successor
shall be appointed by the governor with the advice and consent of
the senate. Each director shall hold office until the expiration
of the term for which the director was appointed and until a
successor has been appointed and has qualified, unless removed
sooner as provided by this section.
(g) A director may be removed by the governor for inefficiency,
neglect of duty, or misconduct in office after at least 30 days'
written notice of the charges against the director and an
opportunity to be heard in person or by counsel at a public
hearing.
(h) The governor shall appoint a person to fill a vacancy on the
board for the unexpired term.
(i) Each director shall qualify by taking the official oath of
office prescribed by the constitution or general laws of the
state.
(j) Each director is entitled to receive fees of office of not
more than $150 per day and reimbursement of actual expenses
incurred in accordance with Chapter 49, Water Code. However, no
director may be paid per diem in excess of 150 days in any one
calendar year.
(k) Eight directors constitute a quorum at any meeting and,
except as otherwise provided by this chapter or in the bylaws,
all action may be taken by the affirmative vote of a majority of
the directors present at any meeting, except that bonds, notes,
or other evidence of indebtedness are subject to the requirements
of Sections 8503.004(p) and 8503.013(f), and no amendment of the
bylaws shall be valid unless authorized or ratified by the
affirmative vote of at least eight directors, unless otherwise
specifically provided by this chapter.
(l) The board is a state board as contemplated by Section 30a,
Article XVI, Texas Constitution.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.006 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(h), eff. September 1, 2007.
Sec. 8503.007. OFFICERS; GENERAL MANAGER; EMPLOYEES. (a) The
governor shall designate a director as the presiding officer of
the board to serve in that capacity at the pleasure of the
governor. The board shall elect one of their number as an
assistant presiding officer.
(b) The board shall select a secretary, who shall keep true and
complete records of all proceedings of the board. Until the
appointment of a secretary or in the event of the secretary's
absence or inability to act, the board shall select a secretary
pro tempore.
(c) The board shall select a general manager. The general
manager is the chief executive officer of the authority.
(d) The board shall select a treasurer, who may also hold the
office of secretary.
(e) The officers described in Subsections (b)-(d) have the
powers and duties, hold office for the term, and are subject to
removal in the manner as may be provided in the bylaws.
(f) The board shall set the compensation of the officers. The
board may appoint the officers described in Subsections (b)-(d),
agents, and employees, may set their compensation and term of
office and the method by which they may be removed, and may
delegate to them the power and duties it determines proper.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.007 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.008. DISBURSEMENT OF FUNDS; SURETY BONDS. (a) The
money of the authority may be disbursed only by checks, drafts,
orders, or other instruments signed by the persons authorized by
the bylaws or a resolution concurred in by no fewer than a
majority of all the directors.
(b) The general manager, the treasurer, and all other officers,
agents, and employees of the authority charged with the
collection, custody, or payment of any funds of the authority
must give bond conditioned on the faithful performance of their
duties and an accounting for all funds and property of the
authority coming into their hands.
(c) The bonds must be in a form and amount, and with a surety
company authorized to do business in this state, approved by the
board.
(d) The premiums on the bonds shall be paid by the authority and
charged as an operating expense.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.008 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.009. OFFICE; RECORDS. (a) The domicile of the
authority is in the city of Austin, Travis County, where the
authority shall maintain its principal office in the charge of
the general manager.
(b) The authority shall keep complete and accurate accounts
conforming to approved methods of bookkeeping.
(c) The accounts and all contracts, documents, and records of
the authority shall be kept at the principal office. The accounts
and contracts shall be open to public inspection at all
reasonable times.
(d) The board shall cause to be made and completed, within 90
days after the end of each fiscal year, an audit of the books of
account and financial records of the authority for that fiscal
year. The audit shall be made by an independent certified public
accountant or firm of certified public accountants.
(e) Copies of a written report of the audit certified by the
accountant or accountants must be placed and kept on file with
the commission, with the comptroller, and at the principal office
of the authority, and be open to public inspection at all
reasonable times.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.009 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.010. CONFLICT OF INTEREST. The provisions of Chapter
171, Local Government Code, apply to conflicts of interest in the
award of authority contracts.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.010 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.011. RATES AND CHARGES. (a) The board shall
establish and collect rates and other charges for the sale or use
of water, water connections, power, electric energy, or other
services sold, furnished, or supplied by the authority. The fees
and charges must be reasonable and nondiscriminatory and
sufficient to produce revenues adequate to:
(1) pay all expenses necessary to the operation and maintenance
of the properties and facilities of the authority;
(2) pay the interest on and principal of all bonds issued under
this chapter as the interest and principal become due and
payable;
(3) pay the principal and interest on any legal debt created by
the authority;
(4) pay all sinking fund and reserve fund payments agreed to be
made with respect to bonds and payable out of those revenues, as
the payments become due and payable; and
(5) fulfill the terms of any agreements made with the
bondholders or with any person on their behalf.
(b) Out of the revenues that may be received in excess of those
required for the purposes specified in Subsection (a), the board
may:
(1) establish a reasonable depreciation and emergency fund;
(2) retire, by purchase and cancellation or redemption, bonds
issued under this chapter; or
(3) apply the excess revenues to any corporate purpose.
(c) The rates and charges of the authority may not be in excess
of what is necessary to fulfill the obligations imposed on the
authority by this chapter or other law. Nothing in this chapter
shall be construed as depriving this state of its power to
regulate and control fees or charges to be collected for the use
of water, water connections, power, electric energy, or other
service; provided, however, that this state pledges to and agrees
with the purchasers and successive holders of the bonds and other
written evidence of indebtedness issued under this chapter that
this state will not limit or alter the power vested in the
authority to establish and collect fees and charges that will
produce revenues sufficient to pay the items specified in
Subsection (a), or in any way impair the rights or remedies of
creditors or bondholders, or of any person on their behalf, until
the bonds and other written evidence of indebtedness, together
with the interest on the bonds or indebtedness and the interest
on unpaid installments of interest and all costs and expenses in
connection with any action or proceedings by or on behalf of the
bondholders and all other obligations of the authority in
connection with the bonds are fully met and discharged.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.011 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.012. PAYMENT OF DEBTS. Any indebtedness, liability,
or obligation of the authority for the payment of money, however
entered into or incurred and whether arising from contract,
implied contract, or otherwise, is payable solely:
(1) out of revenues received by the authority with respect to
its properties, subject to any prior lien on the revenues
conferred by any resolution or resolutions adopted as provided by
this chapter authorizing the issuance of bonds; or
(2) if the board so determines, out of the proceeds of sale by
the authority of bonds payable solely from those revenues.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.012 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.013. ISSUANCE OF BONDS. (a) The authority may issue
bonds from time to time and for any purpose authorized by this
chapter or other general law. If bonds of the authority are
issued, except as otherwise provided under general law, the
bonds:
(1) when sold, shall be sold for cash at public sale to the
highest and best bidder, as determined by the board, and the
interest cost of the money received for the bonds shall be
computed to maturity in accordance with the method prescribed by
the board in connection with the sale of the bonds;
(2) may be issued, on terms determined by the board in exchange
for property of any kind, real, personal, or mixed, or any
interest in property that the board determines necessary or
convenient for any corporate purposes, provided that any property
acquired through the exchange of bonds is certified in writing
before the exchange as being of a value equal to or in excess of
the par value of the bonds by an independent appraisal that is to
be kept on file by the authority as a public record, with a copy
filed with the state auditor;
(3) may be issued in exchange for like principal amounts of
other obligations of the authority, matured or unmatured; or
(4) may be sold to this state or any agency of this state, the
United States, or any agency or corporation created or designated
by this state or the United States in exchange for cash equal in
amount to the principal amount of the bonds sold and the interest
cost of the money received for the bonds, computed to maturity in
accordance with standard bond tables in general use by banks and
insurance companies, as determined by the board.
(b) The proceeds from the sale of the bonds shall be deposited
in one or more banks or trust companies and shall be paid out
under terms and conditions not in conflict with the provisions of
this chapter or other general law that are agreed on between the
authority and the purchasers of the bonds.
(c) The proceeds of the bonds and any net operating revenues
derived from the sale of electric power or water that may be
available after paying the interest on outstanding bonds and the
principal amount of the bonds and after setting aside sufficient
funds for working capital, including a reasonable amount for
contingencies, and setting aside funds for reserves to secure
payment of principal of and interest on outstanding bonds, shall
be used:
(1) to build and construct dams or other structures within the
authority, on the Colorado River and its tributaries, for the
impounding and storage of floodwater and surface water;
(2) to purchase and install in the dams on the Colorado River
hydroelectric generators and other related facilities for the
generation of hydroelectric power;
(3) for the construction of additional lines and the purchase
and installation of additional equipment the board considers
necessary or expedient to enable the authority to continue to
meet the demand for electric power in the areas within the
authority directly served by its transmission lines and
distribution systems on January 1, 1975, and other areas within
the service area served by the authority on January 1, 1975, that
cannot receive comparable service from any other power source and
to provide electric power to this state as provided by Section
8503.004; provided, however, that no steam generating capacity
shall be installed by the authority, except that the authority
may acquire, install, construct, enlarge and make additions to,
and operate one or more steam generating plants, the sum of whose
aggregate capacity may not be more than 5,000 megawatts, to be
located within the boundaries of either one or more of Colorado,
Fayette, Bastrop, Travis, Blanco, Burnet, Llano, or San Saba
counties and to be utilized for the purpose of serving the area
directly served by the authority's transmission lines and
distribution systems on January 1, 1975, and to provide electric
power to this state as provided by Section 8503.004;
(4) to own or acquire an interest in one or more steam
generating plants at any location within or outside the
authority, if the plant or plants are owned in conjunction with
one or more other utilities, public, private, or municipal,
provided that an interest owned or acquired by the authority
shall be utilized for the sole purpose of providing electric
power and energy only in the areas within the authority directly
served by its transmission lines and distribution systems as they
existed on January 1, 1975;
(5) for the purpose of building dams, levees, or other flood
control structures between the city of Austin and the mouth of
the Colorado River that are considered necessary and desirable by
the board and for acquiring or installing facilities necessary to
supply water for irrigation and other useful purposes within the
counties composing the authority; and
(6) in aid of any soil conservation or soil reclamation projects
within the authority that the board determines to be in the
public interest.
(d) Nothing in this section shall be construed as establishing
priorities as to uses of water that are contrary to the general
laws of this state with reference to the water uses.
(e) Except as otherwise provided by general law, proceeds of
bonds sold by the authority, and any net operating revenues that
the board determines are not needed to carry out the projects set
out in Subsections (c)(1), (2), and (3), to the extent not
required by an outstanding trust indenture to be used to redeem
outstanding bonds, shall be placed in a general revenue fund of
the authority. Dams built on the Colorado River or on its
tributaries shall be used for the purpose of impounding and
storing floodwaters and surface waters.
(f) Bonds shall be authorized by resolution of the board
concurred in by at least 12 of the members.
(g) Bonds shall bear the date or dates, mature at the time or
times, bear interest at the rates, payable annually or
semiannually, be in the denominations, be in the form, either
coupon or registered, carry the registration privileges as to
principal only or as to both principal and interest and as to
exchange of coupon bonds for registered bonds or vice versa and
exchange of bonds of one denomination for bonds of other
denominations, be executed in the manner, and be payable at the
place or places within or outside this state that the resolution
may provide.
(h) A resolution authorizing bonds may contain provisions that
are part of the contract between the authority and the holder of
the bonds from time to time:
(1) reserving the right to redeem the bonds at the time or
times, in the amounts, and at the prices, not exceeding 105
percent of the principal amount of the bonds, plus accrued
interest, as may be provided;
(2) providing for the setting aside of interest and sinking
funds or reserve funds and the regulation and disposition of
those funds;
(3) pledging, to secure the payment of the principal of and
interest on the bonds and of the sinking fund or reserve fund
payments agreed to be made with respect to the bonds, all or any
part of the gross or net revenues received by the authority with
respect to the property, real, personal, or mixed, acquired or
constructed or to be acquired or constructed with the bonds or
the proceeds of the bonds, or all or any part of the gross or net
revenues previously or thereafter received by the authority from
any source;
(4) prescribing the purposes to which the bonds or any bonds
issued later are to be applied;
(5) agreeing to set and collect rates and charges sufficient to
produce revenues adequate to pay the items specified in Section
8503.011(a) and prescribing the use and disposition of all
revenues;
(6) prescribing limitations on the issuance of additional bonds
and on the agreements that may be made with the purchasers and
successive holders of the bonds;
(7) relating to the construction, extension, improvement,
reconstruction, operation, maintenance, and repair of the
properties of the authority and the carrying of insurance on all
or any part of the properties covering loss or damage or loss of
use and occupancy resulting from specified risks;
(8) setting the procedure, if any, by which, if the authority so
desires, the terms of a contract with the bondholders may be
amended or abrogated, the amount of bonds whose holders must
consent to that amendment or abrogation, and the manner in which
the consent may be given;
(9) providing for the execution and delivery by the authority,
to a bank or trust company authorized by law to accept trusts, of
indentures and agreements for the benefit of the bondholders
setting forth all of the agreements authorized by this chapter to
be made with or for the benefit of the bondholders and other
provisions that are customary in those kinds of indentures or
agreements; and
(10) making other provisions, not inconsistent with this chapter
or other general law, that the board approves, provided that an
agreement, contract, or commitment may not be made that, under
any contingency, could or would result in the United States
government or any of its agencies or bureaus claiming the right
or privilege of controlling or managing the properties and
facilities of the authority or the control or disposition of the
water of the Colorado River or its tributaries; provided,
however, that nothing in this chapter shall be construed as
limiting or restricting the rights or powers as set out in
Section 8503.014 in the event of a default on the part of the
authority; and provided further that nothing in this chapter is
intended to prohibit compliance with existing federal
regulations, if compliance with those regulations is done on the
advice and approval of the attorney general.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.013 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(i), eff. September 1, 2007.
Sec. 8503.014. DEFAULT PROCEDURES. (a) A resolution
authorizing the issuance of bonds and any indenture or agreement
entered into under the resolution may include provisions
regarding a default on:
(1) the payment of the interest on the bonds as the interest
becomes due and payable;
(2) the payment of the principal of the bonds as they become due
and payable, whether at maturity, by call for redemption, or
otherwise; or
(3) the performance of an agreement made with the purchasers or
successive holders of any bonds.
(b) If a default described by Subsection (a) has occurred and
has continued for a period, if any, prescribed by the resolution
authorizing the issuance of the bonds, the trustee under an
indenture entered into with respect to the bonds authorized by
the resolution, or, if there is no indenture, a trustee appointed
in the manner provided in the resolution by the holders of 25
percent in aggregate principal amount of the bonds authorized by
the resolution and then outstanding, shall, in the trustee's own
name but for the equal and proportionate benefit of all of the
bondholders, and with or without having possession of the bonds:
(1) by mandamus or other suit, action, or proceeding at law or
in equity, enforce all rights of the bondholders, including the
requirements of Section 8503.011;
(2) bring suit on the bonds or the appurtenant coupons;
(3) by action or suit in equity, require the authority to act as
if it were the trustee of an express trust for the bondholders;
(4) by action or suit in equity, enjoin any acts or things that
may be unlawful or in violation of the rights of the bondholders;
or
(5) after such notice to the authority as the resolution may
provide, declare the principal of all of the bonds due and
payable, and if all defaults have been made good, then with the
written consent of the holders of 25 percent in aggregate
principal amount of the bonds then outstanding, annul the
declaration and its consequences; provided, however, that the
holders of more than a majority in principal amount of the bonds
authorized by the resolution and then outstanding shall, by
written instrument delivered to the trustee, have the right to
direct and control any and all action taken or to be taken by the
trustee under this section.
(c) A resolution, indenture, or agreement relating to bonds may
provide that in a suit, action, or proceeding under this section,
the trustee, whether or not all of the bonds have been declared
due and payable and with or without possession of any of the
bonds, is entitled as of right to the appointment of a receiver
who may enter and take possession of all or any part of the
properties of the authority, operate and maintain the properties,
and set, collect, and receive rates and charges sufficient to
provide revenues adequate to pay the items set forth in Section
8503.011(a) and the costs and disbursements of the suit, action,
or proceeding and apply the revenues in conformity with this
chapter and the resolution authorizing the bonds.
(d) In a suit, action, or proceeding by a trustee under this
section, the reasonable fees, counsel fees, and expenses of the
trustee or the receiver, if any, constitute taxable
disbursements, and all costs and disbursements allowed by the
court shall be a first charge on any revenues pledged to secure
the payment of the bonds.
(e) Subject to the provisions of the constitution, the courts of
Travis County have jurisdiction of a suit, action, or proceeding
under this section by a trustee on behalf of the bondholders and
of all property involved in the suit, action, or proceeding.
(f) In addition to the powers specifically provided by this
section, the trustee has all powers necessary or appropriate for
the exercise of the powers specifically provided or incident to
the general representation of the bondholders in the enforcement
of their rights.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.014 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(j), eff. September 1, 2007.
Sec. 8503.015. AUDIT. The authority is subject to the audit
provisions of Subchapter G, Chapter 49, Water Code.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.015 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(k), eff. September 1, 2007.
Sec. 8503.016. AUTHORITY AS CONSERVATION AND RECLAMATION
DISTRICT. (a) The authority shall manage and use its
facilities, the water impounded by its dams on the Colorado River
or its tributaries, and any available net operating revenues to
accomplish, to the extent possible, the purposes included in
Section 59(a), Article XVI, Texas Constitution, that are
enumerated in the provisions of this chapter or other general
law, and the authority shall market electric power that, in the
opinion of the board, will not be immediately needed by the
authority, under contracts and on conditions that will best
enable the authority to pay its operating expenses, meet its
outstanding financial obligations as they mature, supply the
increasing demand for electric power in the area dependent on its
systems for electric service on April 28, 1975, and assure, to
the extent possible, an adequate supply of water for irrigation
and other useful purposes, as it is needed in the various
counties comprising the authority.
(b) When bonds are to be issued to finance in whole or in part
water-impounding facilities, before approving the bonds the
attorney general shall be furnished a resolution from the
commission or its successor agency certifying that the authority
possesses the necessary water right authorizing it to impound or
otherwise appropriate the waters to be utilized by the project.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.016 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.017. BONDS AS NEGOTIABLE INSTRUMENTS. Bonds issued by
the authority under this chapter or other general law are
negotiable instruments under the laws of this state.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.017 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.018. ADDITIONAL POWERS RELATING TO CONTRACTS, RULES,
AND REGULATIONS. The authority may, but without intending by
this provision to limit any powers of the authority as granted to
it by this chapter or other general law, enter into and carry out
contracts or establish or comply with rules and regulations
concerning labor and materials and other related matters in
connection with any project or projects as the authority
considers desirable or as requested by the United States, this
state, or any corporation or agency created, designated, or
established by the United States or this state that may assist in
the financing of the project or projects.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.018 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.019. PURCHASE OF BONDS. The authority may, out of any
funds available for the purpose, purchase bonds issued by it at a
price not exceeding the redemption price applicable at the time
of the purchase, or if the bonds are not redeemable, at a price
not exceeding the principal amount of the bonds plus accrued
interest. All bonds purchased in this manner shall be canceled.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.019 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.020. DISPOSITION OF PROPERTY. (a) Nothing in this
chapter shall be construed as authorizing the authority, and the
authority is not authorized, to mortgage or otherwise encumber
any of its property of any kind, real, personal, or mixed, or any
interest in such property, or to acquire any property or interest
subject to a mortgage or conditional sale, provided that this
section may not be construed as preventing the pledging of the
revenues of the authority as authorized by this chapter.
(b) Nothing in this chapter shall be construed as authorizing
the sale of any property or interest by the authority or by any
receiver of any of its properties or through any court proceeding
or otherwise, unless, by the affirmative vote of three-fourths of
its statutory membership, the board has determined that the
property or interest is not necessary or convenient or of
beneficial use to the business of the authority and has approved
the terms of the sale. Except by sale as expressly authorized in
this section, authority property or interest may not come into
the ownership or control, directly or indirectly, of any person,
firm, or corporation other than a public authority created under
the laws of this state or a nonprofit corporation created by the
authority under Chapter 152, Water Code.
(c) The limitations on the sale of property of the authority in
this section do not and are not intended to preclude the
authority from selling any interest owned or held by the
authority in any jointly owned electric power and generating
facilities constructed, or to be constructed, under Section
8503.004(t), provided that the sale of an ownership interest in a
joint project is provided for and in conformance with any
contract with other owners regarding the electric power and
energy generating facilities.
(d) All authority property is exempt from forced sale, and
nothing in this chapter shall be construed to authorize the sale
of any of the property of the authority under a judgment rendered
in a suit, and a sale of that kind is prohibited.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.020 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(l), eff. September 1, 2007.
Sec. 8503.021. PROPERTY AGREEMENTS WITH CITY OF AUSTIN. Nothing
in this chapter prohibits the authority from owning property in
conjunction with, acquiring property from, or selling property to
the City of Austin, on terms and conditions to which the
authority and the city agree. The authority may acquire property
from the City of Austin subject to repurchase agreements, or
other terms and conditions as are agreed on between the authority
and the city, and may enter into any contractual relations with
the city respecting property that the parties agree on.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.021 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.022. PROPERTY USEFUL IN THE PRODUCTION OR UTILIZATION
OF ELECTRIC ENERGY. This chapter does not prohibit or restrict
the sale, lease, or other disposition, to an electric
cooperative, municipality, nonprofit corporation created by the
authority under Chapter 152, Water Code, or other governmental
agency or body politic and corporate of this state, of any
property acquired or constructed by the authority and incidental
to or used or useful in the generation, production, transmission,
distribution, or sale of electric energy. The authority may
pledge the proceeds of a sale under this section to the same
extent and in the same manner in which it is authorized to pledge
its revenues.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.022 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(m), eff. September 1, 2007.
Sec. 8503.023. PUBLIC ACCESS. (a) The authority may not
prevent the public use of its lands for recreational purposes and
fishing except at such points where, in the opinion of the board,
the use would interfere with the proper conduct of the business
of the authority or would interfere with the lawful use of the
property. A lease of authority lands, except one expressly
permitted by Section 8503.022, is not lawful unless it provides
for free public use of the lands for recreational purposes and
fishing.
(b) All public rights-of-way traversing the areas flooded or to
be flooded by the impounded waters shall remain open as a way of
free public passage to and from the lakes created, and a charge
may not be made to the public for the right to engage in fishing
or boating on or swimming in those lakes.
(c) If any citizen of this state or of the United States advises
the attorney general that this section has not been complied
with, the attorney general may, after investigation of the
complaint and notice to the authority, institute the proper legal
proceedings, if any are required, to require the authority or its
successor to comply with this section.
(d) If any of the authority's land bordering the lakes to be
created under this chapter is sold by the authority, the
authority shall retain in each tract a strip 20 feet wide
abutting the high-water line of the lake for the purpose of
passage and use by the public for public sports and amusements;
provided, however, that this subsection does not apply to any
sales of land by the authority to any state or federal agency to
be used for game or fish sanctuaries or preserves or for game or
fish propagation purposes.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.023 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(n), eff. September 1, 2007.
Sec. 8503.024. BONDS EXEMPT FROM TAXATION. All bonds and
interest on the bonds issued under the provisions of this chapter
are exempt from taxation, except inheritance taxes, by this state
or by any municipal corporation, county, or other political
subdivision or taxing district of this state.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.024 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.025. SOURCE OF AUTHORITY. (a) This chapter, without
reference to other statutory provisions, constitutes full
authority for the authorization and issuance of bonds under this
chapter, and no other act or law regarding the authorization or
issuance of obligations or the deposit of the proceeds of
obligations, or in any way impeding or restricting the carrying
out of the acts authorized by this chapter shall be construed as
applying a limitation to any proceedings taken under or acts done
under this chapter.
(b) Nothing in this chapter shall prevent the authority from
issuing bonds under any applicable general law of this state,
provided, however, that no bonds are issued that would be in
conflict with Section 8503.024.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.025 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(o), eff. September 1, 2007.
Sec. 8503.026. BONDS AS INVESTMENTS AND SECURITY FOR DEPOSITS.
(a) All authority bonds are legal and authorized investments for
individuals, partnerships, profit and nonprofit corporations,
banks, savings banks, trust companies, building and loan
associations, savings and loan associations, insurance companies,
fiduciaries, trustees, and guardians and for the sinking funds of
municipalities, counties, school districts, or other political
corporations or subdivisions of this state.
(b) The bonds are eligible to secure the deposit of all public
funds of this state and any public funds of municipalities,
counties, school districts, or other political corporations or
subdivisions of this state and are lawful and sufficient security
for those deposits to the extent of their par value when
accompanied by all unmatured coupons.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.026 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.027. CONSTRUCTION. (a) This chapter and all of its
terms and provisions shall be liberally construed to carry out
the purposes set forth in this chapter.
(b) Nothing in this chapter affects the meaning of Section
8503.011, formerly Section 222.011, Water Code, and Section 9,
Chapter 74, Acts of the 64th Legislature, Regular Session, 1975,
as it existed prior to the adoption of the former Chapter 222,
Water Code, except where specifically amended.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.027 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(p), eff. September 1, 2007.
Sec. 8503.028. AUTHORITY POWERS IN LAMPASAS COUNTY.
Notwithstanding any other provision of this chapter, the
authority may exercise all powers within Lampasas County that it
may otherwise exercise within the 10 counties specified in
Section 8503.003, except that the authority may not provide water
or wastewater services in the portion of Lampasas County outside
the Colorado River watershed without the consent of the Brazos
River Authority.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.028 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 13.006(q), eff. September 1, 2007.
Sec. 8503.029. ADDITIONAL SPECIFIC POWERS. (a) Notwithstanding
any other provision of this chapter, the authority:
(1) may purchase, construct, acquire, own, operate, repair,
improve, or extend any facility necessary or convenient to
provide water services in Williamson County in cooperation with
another special district, a municipality, or another governmental
entity;
(2) may not provide water services in the watershed of the
Brazos River unless the authority obtains in writing the consent
of the Brazos River Authority before the services are provided;
and
(3) may transfer surface water from the authority to a place in
Williamson County that is outside the watershed of the Colorado
River only if the transfer is made to:
(A) a municipality that was a water customer of the authority on
May 20, 1997, and located in the watersheds of both the Colorado
River and the Brazos River; or
(B) a person or entity that pays for the surface water in an
amount sufficient to pay both the authority's applicable water
rate and an additional charge to pay the costs of mitigating any
adverse effects of the transfer of surface water to Williamson
County from the Colorado River watershed, and provided the
transfer results in no net loss of water to the Colorado River
watershed as determined by the board.
(b) Notwithstanding the amounts of surface water transferred by
the authority to municipalities in accordance with Subsection
(a)(3)(A), the volume of surface water authorized for transfer by
the authority in accordance with Subsection (a)(3)(B) may not
exceed 25,000 acre-feet per year, it being the intent of the
legislature that the authority not be the sole provider of
surface water to Williamson County.
(c) The authority shall determine the amount of the additional
charge under Subsection (a)(3)(B). The additional charge may not
be less than 10 percent of the authority's applicable rate for
surface water to be transferred. The authority shall deposit any
money the authority receives from the additional charge, and may
deposit any other money as the board determines, into a separate
fund designated as the agricultural water conservation fund. The
authority may use money from the agricultural water conservation
fund only for the development of water resources or other water
use strategies to replace or offset the amount of surface water
to be transferred to Williamson County, including the development
and implementation of methods, programs, and strategies relating
to groundwater resources, reuse, conservation, and other
opportunities to reduce the reliance on surface water for
agricultural irrigation, provided that the methods, programs, and
strategies take into consideration the surface water and
groundwater needs of the affected Colorado River basin users.
(d) Before its determination of the use of money from the
agricultural water conservation fund, the authority shall consult
with an advisory committee representing agricultural irrigation
interests that is appointed by the county judges of Matagorda,
Wharton, and Colorado counties. The board's determination of the
additional charge is not subject to review or modification by any
regulatory agency or independent reviewing authority. Water
resources developed or conserved through the additional charge
may be acquired from any source inside or outside the boundaries
of the authority and shall be used to benefit the water service
areas of the authority's irrigation operations.
Added by Acts 2003, 78th Leg., ch. 996, Sec. 1, eff. Sept. 1,
2003.
Renumbered from Water Code, Section 222.029 by Acts 2007, 80th
Leg., R.S., Ch.
921, Sec. 13.006(b), eff. September 1, 2007.
Sec. 8503.030. PROVISION OF WATER TO MUNICIPALITY OUTSIDE
COLORADO RIVER BASIN. (a) This section applies notwithstanding
any other provision of this chapter or other law.
(b) In this section and Section 8503.031:
(1) "Municipality" includes a municipally owned utility.
(2) "Water service area" means the area in which the authority
is authorized to use, distribute, and sell water on January 1,
2001.
(c) Subject to the limitations and restrictions in this section,
the authority may enter into a written contract with a
municipality located outside the water service area to distribute
and sell water to the municipality.
(d) In addition to the authority's applicable water rate, the
authority shall charge a municipality a surcharge determined by
the board according to the terms of the contract to enable the
authority to develop and manage water resources sufficient to
address the projected needs of the authority's water service area
and the needs of the municipality to the extent agreed in the
contract. The contract must provide that the surcharge be
sufficient to allow the authority to recover all capital
construction costs incurred by the authority