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