CHAPTER 362. SOLID WASTE RESOURCE RECOVERY FINANCING ACT

State Codes and Statutes

Statutes > Texas > Health-and-safety-code > Title-5-sanitation-and-environmental-quality > Chapter-362-solid-waste-resource-recovery-financing-act

HEALTH AND SAFETY CODE

TITLE 5. SANITATION AND ENVIRONMENTAL QUALITY

SUBTITLE B. SOLID WASTE, TOXIC CHEMICALS, SEWAGE, LITTER, AND

WATER

CHAPTER 362. SOLID WASTE RESOURCE RECOVERY FINANCING ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 362.001. SHORT TITLE. This chapter may be cited as the

Solid Waste Resource Recovery Financing Act.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.002. POLICY AND PURPOSE. (a) The policy of the state

is to safeguard the public health, general welfare, and physical

property from solid waste pollution by encouraging the processing

of solid waste for the purpose of extracting, converting to

energy, or otherwise separating and preparing solid waste for

reuse.

(b) It is the policy of the state that the processing of solid

waste for reuse is essential to the well-being and survival of

state inhabitants and the protection of the environment. That

processing will conserve and develop state natural resources,

within the meaning of Article XVI, Section 59(a), of the Texas

Constitution by preventing further damage to the environment.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.003. DEFINITIONS. In this chapter:

(1) "Bond" includes a note or other evidence of indebtedness.

(2) "Cost" means expenses related or incidental to the

acquisition, construction, or improvement of a system, including:

(A) real property acquired for a system;

(B) finance charges;

issuer finds reasonable after completion of construction;

(D) expenses incurred for architectural, engineering, and legal

services;

(E) license fees and royalties;

(F) expenses incurred for plans, specifications, surveys, and

estimates;

(G) expenses incurred in placing the system in operation; and

(H) administration expenses.

(3) "Issuer" means a district or authority that:

(A) is created under Article XVI, Section 59, or Article III,

Section 52, of the Texas Constitution;

(B) is authorized by law to own a waste disposal system; and

(4) "Public agency" means:

(A) an issuer;

(B) a municipality; or

authorized to own and operate a solid waste collection,

transportation, or disposal facility or system.

(5) "Real property" means land, a structure, a franchise or

interest in land, air rights, or another thing or right

pertaining to that property, including an easement, right-of-way,

use, lease, license, or other incorporeal hereditament, or an

estate, interest, or legal or equitable right, including a term

for years or lien on that property because of a judgment,

mortgage, or other reason.

(6) "Resolution" means the action, including an order or

ordinance, that authorizes bonds and that is taken by the

issuer's governing body.

(7) "Security agreement" means a trust indenture or other

instrument securing bonds.

(8) "Solid waste" has the meaning assigned by Chapter 361 (Solid

Waste Disposal Act).

(9) "System" means real property, plants, works, facilities,

equipment, pipelines, machinery, vehicles, vessels, rolling

stock, licenses, or franchises used or useful:

(A) in connection with processing solid waste to extract,

recover, reclaim, salvage, reduce, or concentrate the solid

waste, or convert it to energy or useful matter or resources

including electricity, steam, or other form of energy, metal,

fertilizer, glass, or other form of resource; or

(B) in the transportation, receipt, storage, transfer, and

handling of solid waste, the preparation, separation, or

processing of solid waste for reuse, the handling and

transportation of recovered matter, resources, or energy, and the

handling, transportation, and disposition of nonrecoverable solid

waste residue.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.004. EFFECT OF OTHER LAW. (a) This chapter does not

limit the authority of the Texas Natural Resource Conservation

Commission or a local government to:

(1) perform a power or duty provided by other law; or

(2) adopt and enforce rules to carry out duties under Chapter

361 (Solid Waste Disposal Act).

(b) Chapter 361 (Solid Waste Disposal Act) shall be enforced

without regard to ownership of a system financed under this

chapter.

to pursue, against a person who contracts with an issuer under

this chapter, a common-law remedy to abate, or recover damages

for, a condition of pollution or other nuisance. A person

purchasing or leasing a system under contract with an issuer may

not assert the defense of sovereign immunity because of the

issuer's ownership of the system.

(d) An issuer or public agency may use other law not in conflict

with this chapter to the extent convenient or necessary to carry

out any authority expressly or impliedly granted by this chapter.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 3, Sec. 1.031,

eff. Aug. 12, 1991.

Sec. 362.005. EXCEPTION FOR CERTAIN MATERIAL PRESORTED TO BE

RECYCLED. This chapter does not authorize a public agency to

compel burning of material presorted to be recycled.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

SUBCHAPTER B. OPERATION OF SYSTEM

Sec. 362.011. AUTHORITY TO ACQUIRE AND TRANSFER PROPERTY. (a)

An issuer may acquire, construct, and improve a system for lease

or sale as provided by this chapter and may acquire real property

as the issuer considers appropriate for the system.

(b) An issuer may lease its system to another person.

other method of payment, to any person on conditions the issuer

considers desirable.

(d) A lease or sales contract entered into under this chapter

may be for the term agreed to by the parties, and must provide

that it continues in effect until the bonds specified in the

lease or contract, or refunding bonds issued in place of those

bonds, are fully paid.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.012. LOCATION OF SYSTEM. A system may be located on

the property of any person.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.013. CONTRACT TERMS AND PROCEDURES. (a) The

provisions of Chapter 2253, Government Code, that relate to

performance and payment bonds apply to a contract entered into by

an issuer.

(b) An issuer may contract for the acquisition, construction,

and improvement of a system on the terms and under the conditions

that the governing body of the issuer considers appropriate,

including a contract under which a person agrees to perform and

supply all services and materials required in connection with the

design, construction, and placing into operation of a system.

contract will be let in a newspaper of general circulation within

the boundaries of the issuer once a week for two consecutive

weeks, with the first publication occurring not later than the

15th day before the date the contract will be let.

(d) The issuer shall analyze competitive proposals received in

response to the notice and let the contract to the responsible

party making the proposal that is most advantageous to the issuer

and that will result in the most economical completion of the

system.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(17), eff.

Sept. 1, 1995.

Sec. 362.014. PUBLIC AGENCY CONTRACT. (a) A public agency, on

terms it considers appropriate, may contract with an issuer or

other person who finances, constructs, or improves a system to

sell, lease, or dedicate the use of real property or all or part

of a solid waste disposal facility for use as part of the system.

(b) A public agency may contract with any person for the supply,

collection, or transportation of solid waste for disposal at a

system. The public agency may agree in the contract to supply

minimum amounts of solid waste and to pay minimum fees for the

right to dispose of the solid waste at the system during the term

of the contract. The contract may continue in effect for the term

of years that the public agency's governing body determines to be

desirable.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.015. PAYMENT OF CONTRACT FROM SOURCES OTHER THAN TAXES.

(a) A public agency may use any available revenue or resource

for, or pledge the revenue or resource to, payment of all or part

of the amount due under a contract under Section 362.014. The

public agency may agree in the contract to assure availability of

payment when required.

(b) The public agency may agree to make sufficient provision in

its annual budget to make all payments under the contract.

inhabitants or other users or beneficiaries of a service or

facility provided in connection with the contract, a fee, rate,

charge, rental, or other amount for the service or facility,

including a water charge, sewage charge, solid waste disposal fee

or charge, garbage collection or handling fee, or other fee or

charge. The public agency may use those amounts for, or pledge

them to, payments required under the contract, and may agree in

the contract to make that use or pledge in an amount sufficient

to make all or part of the payments when due.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.016. PAYMENT OF CONTRACT FROM TAXES. (a) A public

agency that has taxing power and that, when it enters into a

contract under Section 362.014, is using its general funds,

including tax revenue, to pay all or part of the cost of

providing solid waste collection, transportation, and disposal

services may agree that the payments under the contract are an

obligation against the public agency's taxing power.

(b) Except as provided by Subsection (c), a person is not

entitled to demand payment from taxes during any period unless

the contracting person is willing and able to receive and dispose

of solid waste during the period as provided by the contract.

substantially in accordance with Chapter 1251, Government Code,

applicable to issuance of bonds by a municipality to determine

whether a contract may be an obligation secured by the taxing

power of the public agency to an extent not permitted by

Subsection (b). If it is determined by a favorable vote at the

election that the public agency is authorized to levy an ad

valorem tax to make all or part of the payments under the

contract, and that the payments are to be made unconditionally

regardless of whether the contracting person is willing and able

to receive and dispose of solid waste as provided by the

contract, the contract is an obligation secured by the public

agency's taxing power to the extent provided. The ballot

proposition at the election must plainly state that ad valorem

tax funds may be used to make contract payments if the contractor

cannot receive or dispose of solid waste because of mechanical

failure of the facility financed by the bonds or for other

reasons.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.269, eff. Sept.

1, 2001.

Sec. 362.017. INDUSTRIAL DEVELOPMENT CORPORATION. (a) A public

agency that has entered into a contract under Section 362.014 may

sponsor the creation of an industrial development corporation

under the Development Corporation Act (Subtitle C1, Title 12,

Local Government Code).

(b) The corporation may issue bonds, notes, or other evidences

of indebtedness under the Development Corporation Act (Subtitle

C1, Title 12, Local Government Code) to finance the cost of a

system under the contract regardless of whether the system is

located within the boundaries of the public agency.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 3.15, eff. April 1, 2009.

Sec. 362.018. COST OF CERTAIN REQUIRED ALTERATIONS. The

relocation, raising, lowering, rerouting, changing of grade, or

altering of construction of a highway, railroad, electric

transmission line, telegraph or telephone property or facility,

or pipeline made necessary by the actions of an issuer shall be

accomplished at the sole expense of the issuer, who shall pay the

cost of the required activity as necessary to provide comparable

replacement, minus the net salvage value of any replaced

facility. The issuer shall pay that amount from the proceeds of

bonds issued to finance a system.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.019. TAXATION. (a) Bonds issued under this chapter,

the transfer of the bonds, and income from the bonds are exempt

from taxation in this state.

(b) A system purchased or leased under this chapter is subject

to ad valorem taxation payable by the person contracting with the

issuer according to state law. An item purchased or leased as

part of a system is subject to all applicable state taxation.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

SUBCHAPTER C. BONDS

Sec. 362.031. AUTHORITY TO ISSUE BONDS AND BOND ANTICIPATION

NOTES. (a) An issuer may issue bonds, payable from revenues of

the issuer, to finance or refinance the cost of acquiring,

constructing, or improving a system.

(b) The bonds may be issued in more than one series and from

time to time as required to carry out the purposes of this

chapter.

available to pay the principal of and interest on its bonds or to

meet other needs of the issuer and may issue bond anticipation

notes to borrow the needed money. The bond anticipation notes may

bear interest at any fixed, floating, or other type of rate, and

must mature within one year of their date. The bond anticipation

notes shall be paid with the proceeds of bonds, or bonds may be

issued and delivered in exchange for and in substitution of the

notes.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.032. FORM AND PROCEDURE. (a) Bonds under this chapter

must be authorized by resolution. The bonds must:

(1) be signed by the presiding officer or assistant presiding

officer of the issuer's governing body;

(2) be attested by the secretary of the issuer's governing body;

and

(3) have the seal of the issuer impressed, printed, or

lithographed on the bonds.

(b) The bonds may have the characteristics and bear the

designation determined by the issuer's governing body, except

that the designation must include:

(1) the name of each person guaranteeing the contractual

obligation of each person leasing or purchasing the system; or

(2) a statement, if applicable, that a group of persons will be

leasing or purchasing the system.

printed or lithographed on the bonds. The issuer may adopt or use

the signature of a person who has been an officer, regardless of

whether the person is an officer when the bonds are delivered to

a purchaser.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.033. TERMS. Bonds issued under this chapter must

mature serially or in another manner not more than 40 years after

they are issued. The bonds may:

(1) bear interest at a fixed, floating, or other type of rate,

and be sold at public or private sale at a price or under terms

that the issuer's governing body determines to be the most

advantageous reasonably obtainable;

(2) be made callable before maturity at times and prices

prescribed by the issuer's governing body;

(3) be in coupon form; and

(4) be registrable as to principal or as to principal and

interest.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.034. APPROVAL AND REGISTRATION. (a) An issuer shall

submit bonds that have been authorized by its governing body,

including refunding bonds and the record relating to the bond

issuance, to the attorney general for examination as to their

validity. If the bonds state that they are secured by a pledge of

proceeds of a lease or contract of sale previously entered into

by the issuer, the issuer may submit the contract with the bonds.

(b) If the bonds have been authorized in accordance with state

law and any contract has been made in accordance with state law,

the attorney general shall approve the bonds and contract and the

comptroller shall register the bonds.

are incontestable.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.035. PLEDGE OF REVENUE AND OTHER AMOUNTS AS SECURITY.

(a) Bonds are payable solely from and shall be secured by a

pledge of:

(1) revenues of the issuer derived from the lease or sale of a

system;

(2) amounts attributable to bond proceeds; or

(3) amounts obtained through the exercise of a remedy provided

by the governing body's resolution or a security agreement

securing the bonds in the manner specified in the resolution or

security agreement.

(b) The governing body shall fix and periodically revise

payments under a lease or contract for sale of a system so that

the payments and other pledged revenue will be sufficient to pay

the bonds and interest on the bonds as they mature and become due

and to maintain reserve or other funds as provided by the

resolution or security agreement.

funds created by the resolution or security agreement, and may

delegate this authority to its authorized agent.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.036. SECURITY MAY APPLY TO ADDITIONAL BONDS. (a) A

pledge under Section 362.035 may reserve the right, under

conditions specified by the pledge, to issue additional bonds to

be on a parity with or subordinate to the bonds secured by the

pledge.

(b) Bonds issued under this chapter may be combined in the same

issue with bonds issued for other purposes authorized by law.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.037. TRUST AS SECURITY. (a) The issuer's governing

body may additionally secure bonds, including refunding bonds, by

a trust indenture under which the trustee may be a bank that has

trust powers and that is located inside or outside the state.

(b) Regardless of any mortgage, deed of trust lien, or security

interest under Section 362.038, the trust indenture may:

(1) contain any provision that the governing body prescribes for

the security of the bonds and the preservation of the trust

estate;

(2) provide for amendment or modification of the trust

indenture;

(3) condition the right to spend the issuer's money or sell an

issuer's system as provided by the trust indenture;

(4) provide in other manners for protection and enforcement of

bondholders' rights and remedies as is reasonable and proper; and

(5) provide for the issuance of replacement bonds for lost,

stolen, or mutilated bonds.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.038. OTHER SECURITY. (a) The bonds may be

additionally secured by a mortgage, deed of trust lien, or

security interest in a designated system of the issuer's

governing body and all property and rights appurtenant to the

system.

(b) The mortgage, deed of trust lien, or security interest may

give the trustee the power to operate the system, sell the system

to pay the debt, or take any other action to secure the bonds.

is the absolute owner of the system and rights purchased.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.039. ACTION BY BONDHOLDERS. (a) The resolution or a

security agreement may provide that on default in the payment of

principal of or interest on the bonds, or threatened default

under conditions stated in the resolution or security agreement,

and on petition of the holders of outstanding bonds, a court of

competent jurisdiction may appoint a receiver to collect and

receive pledged income.

(b) The resolution or security agreement may limit or qualify

the rights of less than all of the holders of outstanding bonds

payable from the same source to institute or prosecute litigation

affecting the issuer's property or income.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.040. INVESTMENT AND USE OF PROCEEDS. (a) The

governing body of the issuer may set aside amounts from the

proceeds of the sale of bonds for payment into an interest and

sinking fund and reserve funds and may provide for this in the

resolution or a security agreement. All expenses of issuing and

selling the bonds shall be paid from the proceeds of the sale of

the bonds.

(b) Proceeds from the sale of bonds shall be invested in the

manner provided by the resolution or security agreement.

as depository for proceeds of bonds or of sales contract or lease

revenue. The bank or trust company shall furnish indemnifying

bonds or pledge securities as required by the issuer to secure

the deposits.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.041. REFUNDING BONDS. (a) The governing body of an

issuer may issue refunding bonds to refund the principal of,

interest on, and any redemption premium applicable to outstanding

bonds. The refunding bonds may:

(1) refund more than one series of outstanding bonds and combine

the revenue pledged to the outstanding bonds for the security of

the refunding bonds; and

(2) be secured by other or additional revenues and deed of trust

liens.

(b) The provisions of this chapter relating to issuance of

bonds, security for bonds, approval by the attorney general, and

remedies of bondholders apply to refunding bonds.

(1) on the surrender and cancellation of the original bonds; or

(2) without surrender and cancellation of the original bonds if:

(A) the resolution authorizing the refunding bonds provides that

their proceeds be deposited in the bank where the original bonds

are payable; and

(B) the refunding bonds are issued in an amount sufficient to

pay the principal of, interest on, and any redemption premium

applicable to the original bonds up to their option date or

maturity date.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.042. LEGAL INVESTMENTS; SECURITY FOR DEPOSITS. (a)

Bonds issued under this chapter are legal and authorized

investments for:

(1) a bank;

(2) a savings bank;

(3) a trust company;

(4) a savings and loan association;

(5) an insurance company;

(6) a fiduciary;

(7) a trustee; and

(8) a sinking fund of a municipality, county, school district,

or other political corporation or subdivision of the state.

(b) The bonds may secure the deposits of public funds of the

state or a municipality, county, school district, or other

political corporation or subdivision of the state. The bonds are

lawful and sufficient security for those deposits in an amount up

to their face value, if accompanied by all appurtenant unmatured

coupons.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

Sec. 362.043. BONDS NOT GENERAL OBLIGATION. The bonds are

special obligations payable solely from revenues pledged to their

payment and are not general obligations of the governing body,

the issuer, or the state. A bondholder may not demand payment

from money obtained from a tax or other revenue of the issuer,

excluding revenues pledged to the payment of the bonds.

Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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