CHAPTER 1. GENERAL PROVISIONS AND REGULATIONS
VERNON'S CIVIL STATUTES
TITLE 22. BONDS--COUNTY, MUNICIPAL, ETC.
CHAPTER 1. GENERAL PROVISIONS AND REGULATIONS
Art. 717r. METROPOLITAN WATER CONTROL AND IMPROVEMENT DISTRICTS
AND SUBDISTRICTS; ISSUANCE OF BONDS AND REFUNDING BONDS.
Definitions
Sec. 1. In this Act:
(1) "Refunding bonds" means refunding bonds issued by a
metropolitan water control and improvement district.
(2) "Residential neighborhoods" means an area that, as it
develops, will consist of detached single-family residences on no
less than 79 percent of its net residential acreage, and no more
than an additional 10 percent of its net residential acreage will
consist of condominiums or multifamily rental units with a
density greater than 15 units per net residential acre.
Notwithstanding the foregoing, "residential neighborhoods" means
an area that, as it develops, will consist of detached
single-family residences on no less than 87-1/2 percent of its
net residential acreage if the preliminary engineering report
adopted by the board of directors of the metropolitan water
control and improvement district before the authorization of
bonds stipulated that approximately 87-1/2 percent of the net
residential acreage would consist of single-family residences;
provided, however, that on the full utilization of all facilities
constructed with the proceeds of the bonds so authorized, the
definition of "residential neighborhoods" stated in the first
sentence of this subdivision shall thereafter apply. Variance of
as much as three percent from the percentages set forth above
shall be permissible during development so long as the
percentages are met on completion of development.
(3) "Subdistrict" means a conservation and reclamation district
created pursuant to Article XVI, Section 59, of the Texas
Constitution and this Act to provide freshwater supply and
distribution, sanitary sewage collection and treatment and storm
sewer and drainage facilities and services to residential
neighborhoods.
(4) "Metropolitan water control and improvement district" means
each conservation and reclamation district containing at least
10,000 acres after all exclusions of land have occurred, created
pursuant to Article XVI, Section 59, of the Texas Constitution
whether by general law or special Act that is governed by Chapter
51, Water Code, as amended, to the extent those provisions are
not inconsistent with the provisions of any special Act creating
the district.
Refunding Bonds
Sec. 2. (a) A metropolitan water control and improvement district
may issue bonds to refund all or part of its outstanding bonds,
notes, or other obligations including matured but unpaid
interest.
(b) Refunding bonds shall mature serially or otherwise not more
than 40 years from their date and shall bear interest at any rate
or rates permitted by the constitution and laws of this state.
(c) Refunding bonds may be payable from the same source as the
bonds, notes, or other obligations being refunded or from other
additional sources or from other different sources.
(d) The refunding bonds shall be approved by the attorney general
and shall be registered by the comptroller of public accounts.
After that approval and registration, the refunding bonds shall
be valid and incontestable for all purposes.
(e) The orders or resolutions authorizing the issuance of the
refunding bonds may provide that they shall be sold and the
proceeds deposited in the place or places at which the bonds
being refunded are payable, in which case the refunding bonds may
be issued before the cancellation of the bonds being refunded,
provided an amount sufficient to pay the principal of and
interest on the bonds being refunded to their maturity dates, or
to their option dates if the bonds have been duly called for
payment prior to maturity according to their terms, has been
deposited in the place or places at which the bonds being
refunded are payable. The comptroller of public accounts shall
register these refunding bonds without the surrender and
cancellation of the bonds being refunded. All resolutions
previously adopted by metropolitan water control and improvement
districts authorizing the issuance of refunding bonds are
ratified and confirmed in all respects.
(f) A refunding may be accomplished in one or in several
installment deliveries. Refunding bonds constitute negotiable
instruments and are investment securities governed by the Uniform
Commercial Code (Chapter 8, Business & Commerce Code)
notwithstanding any provisions of law or court decision to the
contrary and are legal and authorized investments for banks,
savings banks, trust companies, savings and loan associations,
insurance companies, fiduciaries, trustees, and guardians, and
for the sinking funds of cities, counties, school districts, and
other political subdivisions or public agencies of this state.
Refunding bonds are eligible to secure deposits of any public
funds of the state and of any city, county, school district, and
any other political subdivision or public agency of the state and
are lawful and sufficient security for the deposits to the extent
of their market value.
(g) In lieu of the methods set forth in this Act, a metropolitan
water control and improvement district may refund bonds, notes,
or other obligations in the manner provided by other general laws
of this state.
(h) Notice of intention to issue refunding bonds shall be
published by the metropolitan water control and improvement
district at least once a week for two consecutive weeks in a
newspaper of general circulation within the metropolitan water
control and improvement district at least 15 days before the
meeting of the governing body at which it is proposed to issue
such bonds. At any time prior to the issuance of the bonds, if a
petition signed by not less than 10 percent of the qualified
voters of the metropolitan water control and improvement district
is filed with the metropolitan water control and improvement
district calling for a referendum on the refunding bond issue,
the governing body shall, at its next meeting, order an election
to be held within the metropolitan water control and improvement
district to determine whether or not the bonds shall be issued.
The election shall be held in the manner prescribed by Chapter
1251, Government Code, for the issuance of municipal bonds.
Creation of Subdistricts
Sec. 3. (a) The Texas Water Commission may create subdistricts
over designated territory within the boundaries of metropolitan
water control and improvement districts as provided by this
section.
(b) A petition that contains the substance of the requirements of
Sections 51.013 and 51.014, Water Code, shall be filed with the
Texas Water Commission.
(c) The Texas Water Commission shall have notice of the hearing
given in the manner required by Section 51.018, Water Code.
(d) The hearing shall be conducted in the manner provided by
Section 51.020, Water Code, and the Texas Water Commission shall
grant or refuse the petition in the manner provided by Section
51.021, Water Code, and the appeal from the decision of the Texas
Water Commission shall be made in the manner provided by Sections
51.022 through 51.025, Water Code, as amended. The Texas Water
Commission shall appoint five directors to serve as the governing
body of the subdistrict, each of whom shall meet the
qualifications provided by Section 51.072, Water Code.
(e) Within 60 days after a petition for the creation of a
subdistrict is granted by the Texas Water Commission, the board
of directors of the subdistrict shall adopt an order calling
elections within the boundaries of the subdistrict in the manner
provided by Sections 51.221 through 51.224, Water Code, for the
following purposes:
(1) to confirm the creation of the subdistrict in the manner
provided by Sections 51.033 and 51.034, Water Code;
(2) to authorize the issuance of bonds by the subdistrict or by
the metropolitan water control and improvement district on behalf
of the subdistrict to be repaid by ad valorem taxes, revenues, or
ad valorem taxes and revenues derived by the subdistrict;
(3) to authorize a tax within the boundaries of the subdistrict
to make payments under a contract with the metropolitan water
control and improvement district to support refunding bonds of
the metropolitan water control and improvement district in
accordance with the exclusions procedure provided by Section 5 of
this Act;
(4) to authorize a maintenance tax within the boundaries of the
subdistrict in the manner provided by Sections 51.360 and 51.361,
Water Code; and
(5) to elect a permanent board of directors for the subdistrict
in the manner provided by Sections 51.074 and 51.075, Water Code.
(f) The subdistrict shall sue and be sued in its own name and
shall, until excluded from the boundaries of the metropolitan
water control and improvement district in accordance with the
provisions of Section 5 of this Act, have concurrent jurisdiction
with the metropolitan water control and improvement district that
is in the territory within the boundaries of the subdistrict and
may exercise any of the rights, powers, and authority of the
metropolitan water control and improvement district within the
boundaries of the subdistrict.
(g) The ad valorem plan of taxation shall apply to each
subdistrict, and there shall be no hearing for exclusions of land
from the subdistrict necessary prior to the elections provided in
this section.
(h) The subdistrict may be dissolved in the same manner as the
metropolitan water control and improvement district.
(i) The subdistrict shall be governed by Chapter 51, Water Code,
as amended, and all other general laws of this state to the
extent those laws are not inconsistent with this Act.
Bonds of the Subdistrict
Sec. 4. (a) Before adopting the order calling elections provided
by Subsection (e) of Section 3 of this Act, the engineers for the
subdistrict shall present a report to the governing body of the
subdistrict that conforms to Section 51.410, Water Code, with
regard to the bonds to be issued by the subdistrict or by the
metropolitan water control and improvement district on behalf of
the subdistrict.
(b) After the engineer's report is filed and approved, the
governing body of the subdistrict shall order an election within
the boundaries of the subdistrict to authorize the issuance of
bonds by the subdistrict or by the metropolitan water control and
improvement district on behalf of the subdistrict in accordance
with the provisions of this Act and Sections 51.411 and 51.412,
Water Code.
(c) Bonds authorized at an election within the subdistrict may
only be repaid from ad valorem taxes imposed on all taxable
property within the boundaries of the subdistrict or income,
increment, and revenue derived from the ownership or operation of
any part of the assets of the subdistrict or any combination of
the foregoing, and the metropolitan water control and improvement
district is not liable for the repayment of those bonds other
than specifically set forth in this subsection.
(d) Bonds issued by a subdistrict or by the metropolitan water
control and improvement district on behalf of the subdistrict
shall be submitted to the attorney general for approval and to
the comptroller of public accounts for registration in the method
specified by Sections 51.416 through 51.418, Water Code, and
shall be subject to the provisions of Sections 51.419 through
51.438, Water Code, as amended. Refunding bonds may be issued by
a subdistrict as provided by Section 2 of this Act.
(e) Bonds issued by a subdistrict or by the metropolitan water
control and improvement district on behalf of the subdistrict are
investment securities under Chapter 726, Acts of the 67th
Legislature, Regular Session, 1981 (Article 2529b-1, Vernon's
Texas Civil Statutes), and are bonds under Chapter 845, Acts of
the 67th Legislature, Regular Session, 1981 (Article 717k-6,
Vernon's Texas Civil Statutes), and are otherwise subject to the
provisions of general laws of this state relating to bonds of a
water control and improvement district to the extent that those
general laws are not inconsistent with this Act.
Exclusion of Territory Within Subdistrict
Sec. 5. (a) Under Subsection (e) of Section 3 of this Act, the
governing body of the subdistrict shall call an election within
the subdistrict to coincide with the confirmation election, at
which election a proposition shall be submitted to the qualified
voters that would authorize the subdistrict to enter into a
contract with the metropolitan water control and improvement
district under which the subdistrict would levy an unlimited ad
valorem tax on all taxable property within the subdistrict to
repay to the metropolitan water control and improvement district
a portion of the metropolitan water control and improvement
district's total outstanding indebtedness, that portion to be
calculated by multiplying the total outstanding indebtedness of
the metropolitan water control and improvement district on the
date of the first payment under the contract by a percentage
equal to the proportion of the total taxable property within the
metropolitan water control and improvement district borne by the
total taxable property within the subdistrict, as of the date of
the next preceding tax roll.
(b) The ballots in the election under Subsection (a) of this
section shall be printed to provide for voting for or against the
following proposition: "The execution of a contract and the levy
of taxes to pay for the contract." A copy of the proposed
contract shall be available at the office of the metropolitan
water control and improvement district for inspection before the
election. The election shall otherwise be conducted in conformity
with Chapter 51, Water Code, as amended, for elections to approve
a tax-supported contract with the United States.
(c) If the proposition is approved at the election within a
subdistrict, the governing board of the metropolitan water
control and improvement district shall, on receipt of a petition
that conforms substantially to Section 51.694, Water Code, and
that describes all of the territory within the subdistrict,
conduct a hearing within 30 days after receipt of the petition on
the exclusion of the subdistrict from the boundaries of the
metropolitan water control and improvement district.
(d) If the governing body of the subdistrict establishes at the
hearing that the subdistrict has been created, has authorized
issuance of bonds by the subdistrict or by the metropolitan water
control and improvement district on behalf of the subdistrict,
has authorized the tax-supported contract payment, and has
elected a permanent board of directors, the governing board of
the metropolitan water control and improvement district shall, at
the conclusion of the hearing, enter an order approving the
contract supported by a tax within the subdistrict, and excluding
all land within the subdistrict from the boundaries of the
metropolitan water control and improvement district contingent
only on the completion of the refunding bond issue.
(e) Refunding bonds may be issued by a metropolitan water control
and improvement district to implement the exclusion of land
within a subdistrict under any terms and conditions that are
deemed advisable by the governing body of the metropolitan water
control and improvement district and shall only be subject to the
interest rate limitations imposed by the constitution and laws of
this state. In the event refunding bonds are not issued by a
metropolitan water control and improvement district within 30
days after the hearing at which the subdistrict establishes all
items in Subsection (d) of this section, all property within the
subdistrict shall be deemed to be excluded from the boundaries of
the metropolitan water control and improvement district on the
expiration of the 30th day.
(f) Any subdistrict located within a service area as defined by
an Environmental Protection Agency grant utilized by a
metropolitan water control and improvement district to expand its
wastewater treatment plant shall obtain wastewater treatment
services to the extent of capacity provided with Environmental
Protection Agency funds from the wastewater treatment plant
constructed with the prior proceeds of the Environmental
Protection Agency grant in accordance with the terms of a
contract approved by the governing bodies of the subdistrict and
the metropolitan water control and improvement district.
(g) To reduce the cost of services to its residents and
taxpayers, the subdistrict shall utilize the employees,
consultants, staff, and services of the metropolitan water
control and improvement district and shall reimburse the
metropolitan water control and improvement district for all costs
of furnishing those services. The services could be terminated
for good cause. In the event of dispute, the subdistrict and
metropolitan water control and improvement district will obtain
arbitration of the dispute.
Water and Sewer Rates
Sec. 6. The metropolitan water control and improvement district
shall establish rates for all services to subdistricts after
their exclusion from the boundaries of the metropolitan water
control and improvement district that shall not exceed 150
percent of the rates for similar service for residents of the
metropolitan water control and improvement district.
Election Dates
Sec. 7. All of the elections authorized by this Act may be held
on any day of the year other than a general election date and
shall not be limited to the uniform election dates established by
Section 9b, Texas Election Code, as amended (Article 2.01b,
Vernon's Texas Election Code).
Public Purpose
Sec. 8. The legislature finds and determines that this Act will
facilitate and advance the conservation and reclamation of the
natural resources of this state by permitting certain water
control and improvement districts to extend freshwater supply and
distribution facilities, storm water and flood control
facilities, and sanitary sewage collection and treatment
facilities into areas that have previously not received such
facilities. The reclamation of land for development and use as
residential neighborhoods will be implemented and the health,
welfare, and safety of residents of those neighborhoods will be
additionally protected.
Construction
Sec. 9. The powers granted by this Act to metropolitan water
control and improvement districts shall be construed liberally to
effectuate the legislative intent and the purposes of this Act,
and all those powers shall be broadly interpreted to effectuate
that intent and those purposes and not as a limitation of powers.
Severability
Sec. 10. If one or more of the sections, provisions, clauses, or
words of this Act or the application of those sections,
provisions, clauses, or words to any situation or circumstance
shall for any reason be held to be invalid or unconstitutional,
the invalidity or unconstitutionality shall not affect any other
sections, provisions, clauses, or words of this Act or the
application of those sections, provisions, clauses, or words to
any other situation or circumstance, and it is intended that this
Act shall be severable and shall be construed and applied as if
the invalid or unconstitutional section, provision, clause, or
word had not been included in this Act.
Acts 1983, 68th Leg., p. 4370, ch. 702, eff. June 19, 1983; Sec.
2(h) amended by Acts 1999, 76th Leg., ch. 1064, Sec. 45, eff.
Sept. 1, 1999.