CHAPTER 20. TEXAS WATER RESOURCES FINANCE AUTHORITY
WATER CODE
TITLE 2. WATER ADMINISTRATION
SUBTITLE C. WATER DEVELOPMENT
CHAPTER 20. TEXAS WATER RESOURCES FINANCE AUTHORITY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 20.001. LEGISLATIVE PURPOSE AND POLICY. (a) The
legislature declares that it is the policy of the state to:
(1) encourage and assist in the conservation and development of
the water resources of the state for all useful and lawful
purposes by the acquisition, improvement, extension, or
construction of water resource conservation and development
projects;
(2) encourage the optimum development of the feasible sites
available for the construction or enlargement of dams and
reservoirs for conservation of the public water of the state held
in trust for the use and benefit of the public through assistance
and participation in the acquisition and development of water
storage facilities and systems or works necessary for filtration,
treatment, and transportation of water from storage to points of
treatment, filtration, and distribution;
(3) aid in the protection of the quality of the water resources
of the state by encouraging and assisting in the financing of
water quality enhancement projects; and
(4) aid in flood control, drainage, subsidence control,
recharge, chloride control, agricultural soil and water
conservation, and desalinization by encouraging and assisting in
the financing of projects necessary to those purposes.
(b) The legislature finds that existing mechanisms for
implementing the policies stated in Subsection (a) of this
section may be enhanced by financing as provided in this
subchapter.
(c) The legislature finds that to enhance the ability of the
state to aid in the accomplishment of the purposes stated in
Subsection (a) of this section, it is necessary to create a water
resources finance authority for the purpose of increasing the
availability of financing by purchasing political subdivision
bonds, and the legislature declares that the creation of the
authority for this purpose is a public purpose and a use for
which public money may be borrowed, spent, advanced, loaned,
granted, or appropriated, and that this use serves a public
purpose in improving or otherwise benefitting the people of this
state. Also, the legislature determines and declares the
necessity of enacting this subchapter is in the public interest.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.002. DEFINITIONS AND CONSTRUCTION. In this subchapter:
(1) "Authority" means the Texas Water Resources Finance
Authority.
(2) "Authorized investments" means:
(A) direct obligations of or obligations the principal of and
interest on which are guaranteed by the United States;
(B) direct obligations of or participation certificates
guaranteed by the Federal Intermediate Credit Bank, Federal Land
Banks, Federal National Mortgage Association, Federal Home Loan
Banks, and Banks for Cooperatives;
(C) direct obligations of or obligations the principal of and
interest on which are guaranteed by the State of Texas;
(D) bonds of cities, counties, and other political subdivisions
of this state, other than bonds issued by a political subdivision
to finance a project covered by this chapter;
(E) certificates of deposit of state and national banks that
satisfy the requirements of Section 2.015, Chapter 240, Acts of
the 69th Legislature, Regular Session, 1985 (Article 4393-1,
Vernon's Texas Civil Statutes), and the rules of the comptroller
and if the authority or a financial institution acting solely as
agent for the authority possesses the collateral securing those
deposits; and
(F) direct security repurchase agreements made only with state
or national banks domiciled in the state under which the
authority buys, holds in its possession or the possession of a
financial institution acting solely as agent for the authority
for a specified time, and then sells back any of the following
securities, obligations, or participation certificates:
(i) United States government securities;
(ii) direct obligations of or obligations the principal of and
interest on which are guaranteed by the United States; and
(iii) direct obligations of or participation certificates
guaranteed by the Federal Intermediate Credit Bank, Federal Land
Banks, Federal National Mortgage Association, Federal Home Loan
Banks, and Banks for Cooperatives.
(3) "Board" means the board of directors of the authority.
(4) "Bond" means any type of interest-bearing obligation,
including any bond, note, bond anticipation note, or other
evidence of indebtedness under this chapter.
(5) "Development board" means the Texas Water Development Board.
(6) "Director" means a member of the board.
(7) "Political subdivision" means a city, county, or other body
politic or corporate of the state, including any district or
authority created under Article III, Section 52, or Article XVI,
Section 59, of the Texas Constitution, a state agency, an entity
created by an interstate compact to which the state is a party,
and any nonprofit water supply corporation created and operating
under Chapter 67.
(8) "Political subdivision bonds" means bonds, notes, or other
securities that were issued by and any debt or other contractual
obligations that were incurred by a political subdivision for the
purpose of financing or refinancing projects for water resource
development and conservation, water quality enhancement, flood
control, drainage, subsidence control, recharge, chloride
control, agricultural soil and water conservation,
desalinization, or any combination of these purposes.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987. Amended by Acts 1997, 75th Leg., ch. 891, Sec. 3.21, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 18.63, eff.
Sept. 1, 1999.
SUBCHAPTER B. ADMINISTRATIVE PROVISIONS
Sec. 20.011. CREATION OF AUTHORITY. (a) The Texas Water
Resources Finance Authority is created as a governmental entity
and a body politic and corporate.
(b) The exercise of the powers and duties by the authority under
this chapter constitutes an essential public purpose of the state
in promoting the general welfare of the state and its citizens.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.012. BOARD OF DIRECTORS. (a) The authority is governed
by a board of directors composed of the six directors of the
development board.
(b) Each director serves on the board as an additional duty to
those required of a member of the development board.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.013. COMPENSATION; REIMBURSEMENT. The directors are not
entitled to receive compensation for their service on the board
but are entitled to be reimbursed for their expenses in
performing their powers and duties under this chapter.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.014. ORGANIZATION OF BOARD. (a) The board shall select
from its membership one person to serve as chairman and one
person to serve as vice-chairman.
(b) The person selected as chairman shall preside at meetings of
the board and perform other duties directed by the board, and the
vice-chairman shall preside at meetings of the board in the
absence of the chairman.
(c) The board shall select persons to serve as secretary and
treasurer for the authority. The persons selected as secretary
and treasurer are not required to be directors and the positions
of secretary and treasurer may be held by one person. The board
also may appoint assistant secretaries.
(d) The secretary is the custodian of the minutes, books,
records, and seal of the board, and the secretary and the
treasurer shall perform duties as directed by the board.
(e) The chairman, vice-chairman, secretary, and treasurer shall
be selected by the board at the first meeting of the board
following January 31 of each odd-numbered year.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.015. BOARD MEETINGS. (a) The board shall hold regular
meetings at times provided by its rules and shall meet at least
once each calendar year.
(b) The board may hold special meetings at the call of the
chairman or on request of three or more directors.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.016. RULES AND RESOLUTIONS. The board may adopt rules
that are necessary to carry out this chapter and may take
official action by adoption of a resolution or order.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.017. LIABILITY. A director or officer of the authority
is not liable for any bonds issued or contracts executed by the
authority.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.018. GENERAL FISCAL AUTHORITY. The board may acquire,
hold, invest and reinvest in authorized investments, deposit,
use, and dispose of the authority's revenues, income, receipts,
funds, and money from every source and may select its depository
or depositories, inside or outside the state, subject only to
this chapter and any covenants with respect to the authority's
bonds.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.019. PROPERTY TAX EXEMPT. (a) The property of the
authority, its income, and its operations are exempt from all
taxes and assessments imposed by the state and political
subdivisions on property acquired or used by the authority under
this chapter.
(b) If the authority is dissolved, all of its rights and
properties vest in the state.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.020. FISCAL YEAR; ANNUAL AUDIT. (a) The authority
shall operate on a fiscal year beginning September 1.
(b) The state auditor may audit the authority's books and
accounts, based on a risk assessment performed by the state
auditor and subject to the legislative audit committee's approval
of including the audit in the audit plan under Section 321.013,
Government Code. The cost of an audit shall be paid by the
authority.
(c) A copy of the audit shall be filed with the governor and
with both houses of the legislature on or before January 1 of
each year, except if the audit is being made by the state auditor
and is not available by January 1, it shall be filed as soon as
it is available.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987. Amended by Acts 2003, 78th Leg., ch. 785, Sec. 50, eff.
Sept. 1, 2003.
Sec. 20.021. AUTHORITY EXPENSES. (a) Expenses incurred by the
authority under this Act shall be paid solely from revenues or
funds provided or to be provided under this chapter.
(b) This chapter may not be construed to authorize the authority
to incur any indebtedness or liability on behalf of or payable by
the state.
(c) The authority may not accept and is not entitled to receive
any money appropriated by the state.
(d) The board shall use all available sources of revenue and
income to pay expenses of operation and maintenance of the
authority, to pay the premium, principal of and interest on
bonds, and to create and maintain any reserves or funds provided
by resolutions authorizing the issuance of bonds.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.022. SUITS. The authority may sue and be sued in the
courts of this state in the name of the authority, and the courts
shall take judicial notice of the creation of the authority.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.023. SEAL. The board may adopt a seal for the
authority.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
SUBCHAPTER C. POWERS AND DUTIES
Sec. 20.041. GENERAL POWERS AND DUTIES. The authority may
exercise any authority necessary or appropriate to carry out the
purposes of this chapter.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.042. GIFTS, GRANTS, ETC. The board may request and
accept for the authority grants, allocations, subsidies,
guaranties, aid, contributions, services, labor, materials,
gifts, and donations.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.043. CONTRACTS. The board on behalf of the authority
may enter into contracts with any person to carry out this
chapter.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.044. PURCHASE OF INSURANCE. The board may purchase for
the authority and pay premiums on insurance of any type, in any
amounts, and from any insurers the board considers advisable.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.045. CONTRACTS WITH DEVELOPMENT BOARD. The authority
may enter into contracts with the development board and with
consultants as necessary to perform the functions provided by
this chapter.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
SUBCHAPTER D. POLITICAL SUBDIVISION BONDS
Sec. 20.071. PURCHASE OF POLITICAL SUBDIVISION BONDS. The board
may purchase political subdivision bonds including bonds that are
acquired or owned by the development board.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.072. ACQUISITION OF CERTAIN DEVELOPMENT BOARD BONDS. If
the board agrees to purchase political subdivision bonds from the
development board that have not been purchased by the development
board at the time of the agreement, the board may pay the
purchase price for those bonds in exchange for the agreement of
the development board to transfer those bonds to the board at the
time the development board acquires them.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.073. PRICE AND TERMS OF PURCHASE. The board shall
purchase political subdivision bonds at prices and under terms
the board determines to be reasonable.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.074. REVENUE BONDS. (a) The board may issue revenue
bonds in the name of the authority to finance the cost of
acquisition of political subdivision bonds and to pay the cost of
bond issuance.
(b) The board may provide for payment of the premium, principal
of, and interest on revenue bonds by pledging all or part of the
revenue derived from political subdivision bonds acquired or to
be acquired by the authority or from other sources of funds
available to the authority.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.075. CONTRACT FOR OBTAINING COMPLIANCE WITH POLITICAL
SUBDIVISION BONDS. The board shall enter into a contract with
the development board for the development board to perform the
functions required to ensure that the political subdivisions pay
the debt service on political subdivision bonds and observe the
conditions and requirements set forth in those bonds.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.076. ENFORCEMENT OF POLITICAL SUBDIVISION BONDS. (a)
If there is a default in the payment of principal of or interest
on political subdivision bonds purchased by the authority or any
other default as defined in the proceedings or indentures
authorizing the issuance of the bonds, the attorney general shall
institute appropriate proceedings for mandamus or other legal
remedies to compel the political subdivision or its officers,
agents, and employees to cure the default by performing those
duties that they are legally obligated to perform.
(b) The proceedings shall be brought and venue shall be in a
district court of Travis County.
(c) This section is cumulative of any other rights or remedies
to which the board may be entitled.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
SUBCHAPTER E. BOND PROCEDURES
Sec. 20.101. ISSUANCE OF BONDS. For the issuance of bonds under
this chapter, the board may exercise the authority granted to the
governing body of an issuer with regard to issuance of
obligations under Chapter 1371, Government Code, to the extent
that it is not inconsistent with this chapter.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.416, eff.
Sept. 1, 2001.
Sec. 20.102. CONDITIONS FOR ISSUANCE OF BONDS. (a) Bonds may
be issued as various series and issues.
(b) Bonds issued by the authority may mature serially or
otherwise not later than 50 years after the date on which they
are issued.
(c) The bonds may bear interest at a rate or rates determined in
accordance with the resolution or order authorizing the issuance
of the bonds but not to exceed the net effective interest rate
authorized by Chapter 1204, Government Code.
(d) Rates of interest on bonds may be fixed, variable, floating,
adjustable, or otherwise.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.417, eff.
Sept. 1, 2001.
Sec. 20.103. PERIODIC DETERMINATION OF INTEREST. A bond
resolution or order may provide for the periodic determination of
interest rates without the board being required to give specific
approval.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.104. PERSONS DESIGNATED TO ACT AS AGENTS OF BOARD. (a)
A bond resolution or order may delegate to one or more officers,
employees, or agents designated by the board authority to act on
behalf of the board during the time bonds are outstanding to fix
dates, prices, interest rates, and interest payment periods and
to perform other procedures specified in the resolution.
(b) The person designated by the board may adjust the interest
on bonds as necessary to permit the bonds to be sold or resold at
par in conjunction with secondary market transactions.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.105. SECURITY QUALIFICATIONS. The board may take any
action necessary to qualify the authority bonds for offer and
sale under the securities laws and regulations of the United
States, this state, and other states of the United States.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.106. INVESTMENT SECURITIES. The bonds and any interest
coupons are investment securities under Chapter 8, Business &
Commerce Code, and may be issued registrable as to principal or
as to both principal and interest or may be made redeemable
before maturity at the option of the authority or may contain a
mandatory redemption provision.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.107. FORM OF BONDS. (a) The authority's bonds may be
issued in the form, denominations, and manner and under the
terms, conditions, and details as provided by the board in the
resolution or order authorizing their issuance.
(b) The bonds shall be signed and executed as provided by the
board's resolution or order authorizing the issuance of the
bonds.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.108. FUNDS. (a) In the resolution or order authorizing
issuance of bonds, the board may make additional covenants with
respect to the bonds and the pledged revenues and may provide for
the flow of funds and the establishment, maintenance, and
investment of funds.
(b) The funds established may include an interest and sinking
fund, a reserve fund, and other funds that will be kept and
maintained by or under the direction of the board.
(c) Any funds established by the board are not to be part of the
state treasury but, at the direction of the board, may be kept
and held in escrow and in trust by the state treasury on behalf
of the authority and the owners of the bonds and used only as
provided by this chapter.
(d) Money in the funds shall be invested in authorized
investments as provided by any bond resolutions and orders of the
authority.
(e) Legal title to money in any fund is in the authority unless
or until paid from the fund as provided by this chapter or the
resolutions or orders authorizing the authority's bonds.
(f) The comptroller, as custodian of any of the funds, shall
administer the funds solely and strictly as provided by this
chapter and the resolutions or orders authorizing the bonds, and
the state may not take any other action relating to any of those
funds except those specified in this chapter and the resolutions
and orders authorizing the bonds.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 20.08, eff.
Sept. 1, 1997.
Sec. 20.109. RESOLUTIONS, ORDERS, ETC. (a) The resolutions or
orders authorizing the bonds may prohibit the further issuance of
bonds or other obligations payable from the pledged revenue or
may reserve the right to issue additional bonds to be secured by
a pledge of and payable from the revenue on a parity with or
subordinate to the lien and pledge in support of the bonds being
issued.
(b) The orders or resolutions of the board issuing bonds may
include other provisions and covenants that the board determines
necessary.
(c) In a resolution or order authorizing the issuance of the
authority's bonds, the board may prescribe systems, methods,
routines, and procedures under which the authority will function.
(d) The board may adopt and have executed any other proceedings
or instruments necessary and convenient in the issuance of bonds.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.110. APPROVAL OF ATTORNEY GENERAL. The bonds issued
under this chapter are subject to review and approval by the
attorney general in the same manner and with the same effect as
provided by Chapter 1371, Government Code.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.418, eff.
Sept. 1, 2001.
Sec. 20.111. BOND REVIEW BOARD. (a) Bonds may not be issued
under this section unless the issuance has been reviewed and
approved by the bond review board. The bond review board is
composed of:
(1) the governor;
(2) the lieutenant governor;
(3) the speaker of the house of representatives; and
(4) the comptroller of public accounts.
(b) The governor is chairman of the review board. The bond
review board may adopt rules governing application for review,
the review process, and reporting requirements. A member of the
bond review board may not be held liable for damages resulting
from the performance of the members' functions under this
section.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 20.09, eff.
Sept. 1, 1997.
Sec. 20.112. REFUNDING BONDS. (a) The board may issue
refunding bonds to refund all or part of its outstanding bonds
issued under this chapter, including matured but unpaid interest.
(b) The board may refund bonds in the manner provided by general
law for revenue bonds.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.113. ELIGIBLE SECURITY. The bonds are eligible to
secure deposits of public funds of the state and cities,
counties, school districts, and other political subdivisions of
the state. The bonds are lawful and sufficient security for
deposits to the extent of their face value.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.114. LEGAL INVESTMENTS. The bonds are legal and
authorized investments for:
(1) banks;
(2) savings banks;
(3) trust companies;
(4) savings and loan associations;
(5) insurance companies;
(6) fiduciaries;
(7) trustees;
(8) guardians; and
(9) sinking funds of cities, counties, school districts, and
other political subdivisions of the state and other public funds
of the state and its agencies, including the permanent school
fund.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.115. TAX EXEMPT. Since the authority is performing an
essential governmental function in the exercise of the powers
conferred on it by this chapter, the bonds issued under this Act,
and the interest and income from the bonds, including any profit
made on the sale of bonds, and all fees, charges, gifts, grants,
revenues, receipts, and other money received or pledged to pay or
secure the payment of bonds are free from taxation and
assessments of every kind by this state and any city, county,
district, authority, or other political subdivision of this
state.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.116. PLEDGE OF STATE FAITH AND CREDIT; COVENANT WITH
OWNERS OF BONDS. (a) The authority's bonds are obligations
solely of the authority and are payable solely from funds of the
authority, and this chapter and the authority's bonds are not and
do not create or constitute a pledge, giving, or lending of the
faith or credit or taxing authority of the state.
(b) Each bond of the authority must include a statement that the
state is not obligated to pay the premium, principal of, or
interest on the authority's bonds and that the faith or credit
and the taxing authority of the state is not pledged, given, or
loaned to those payments.
(c) The state pledges to and agrees with the owners of any bonds
issued in accordance with this chapter that the state will not
limit or alter the rights vested in the authority to fulfill the
terms of any agreements made with the owners of the bonds or in
any way impair the rights and remedies of those owners until the
bonds, together with any premium and interest, interest on any
unpaid premium or installments of interest, and all costs and
expenses in connection with any action or proceeding by or on
behalf of those owners, are fully met and discharged. The
authority may include this pledge and agreement of the state in
any agreement with the owners of bonds.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.
Sec. 20.117. ENFORCEMENT BY MANDAMUS. A writ of mandamus and
all other legal and equitable remedies are available to any party
at interest to require the authority and any other party to carry
out agreements and to perform functions and duties under this
chapter, the Texas Constitution, or the authority's bond
resolutions and orders.
Added by Acts 1987, 70th Leg., ch. 728, Sec. 1, eff. June 20,
1987.