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CHAPTER 1. GENERAL PROVISIONS AND REGULATIONS

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VERNON'S CIVIL STATUTESTITLE 22. BONDS--COUNTY, MUNICIPAL, ETC.CHAPTER 1. GENERAL PROVISIONS AND REGULATIONSArt. 717r. METROPOLITAN WATER CONTROL AND IMPROVEMENT DISTRICTSAND SUBDISTRICTS; ISSUANCE OF BONDS AND REFUNDING BONDS.DefinitionsSec. 1. In this Act:(1) "Refunding bonds" means refunding bonds issued by ametropolitan water control and improvement district.(2) "Residential neighborhoods" means an area that, as itdevelops, will consist of detached single-family residences on noless than 79 percent of its net residential acreage, and no morethan an additional 10 percent of its net residential acreage willconsist of condominiums or multifamily rental units with adensity greater than 15 units per net residential acre.Notwithstanding the foregoing, "residential neighborhoods" meansan area that, as it develops, will consist of detachedsingle-family residences on no less than 87-1/2 percent of itsnet residential acreage if the preliminary engineering reportadopted by the board of directors of the metropolitan watercontrol and improvement district before the authorization ofbonds stipulated that approximately 87-1/2 percent of the netresidential acreage would consist of single-family residences;provided, however, that on the full utilization of all facilitiesconstructed with the proceeds of the bonds so authorized, thedefinition of "residential neighborhoods" stated in the firstsentence of this subdivision shall thereafter apply. Variance ofas much as three percent from the percentages set forth aboveshall be permissible during development so long as thepercentages are met on completion of development.(3) "Subdistrict" means a conservation and reclamation districtcreated pursuant to Article XVI, Section 59, of the TexasConstitution and this Act to provide freshwater supply anddistribution, sanitary sewage collection and treatment and stormsewer and drainage facilities and services to residentialneighborhoods.(4) "Metropolitan water control and improvement district" meanseach conservation and reclamation district containing at least10,000 acres after all exclusions of land have occurred, createdpursuant to Article XVI, Section 59, of the Texas Constitutionwhether by general law or special Act that is governed by Chapter51, Water Code, as amended, to the extent those provisions arenot inconsistent with the provisions of any special Act creatingthe district.Refunding BondsSec. 2. (a) A metropolitan water control and improvement districtmay issue bonds to refund all or part of its outstanding bonds,notes, or other obligations including matured but unpaidinterest.(b) Refunding bonds shall mature serially or otherwise not morethan 40 years from their date and shall bear interest at any rateor rates permitted by the constitution and laws of this state.(c) Refunding bonds may be payable from the same source as thebonds, notes, or other obligations being refunded or from otheradditional sources or from other different sources.(d) The refunding bonds shall be approved by the attorney generaland shall be registered by the comptroller of public accounts.After that approval and registration, the refunding bonds shallbe valid and incontestable for all purposes.(e) The orders or resolutions authorizing the issuance of therefunding bonds may provide that they shall be sold and theproceeds deposited in the place or places at which the bondsbeing refunded are payable, in which case the refunding bonds maybe issued before the cancellation of the bonds being refunded,provided an amount sufficient to pay the principal of andinterest on the bonds being refunded to their maturity dates, orto their option dates if the bonds have been duly called forpayment prior to maturity according to their terms, has beendeposited in the place or places at which the bonds beingrefunded are payable. The comptroller of public accounts shallregister these refunding bonds without the surrender andcancellation of the bonds being refunded. All resolutionspreviously adopted by metropolitan water control and improvementdistricts authorizing the issuance of refunding bonds areratified and confirmed in all respects.(f) A refunding may be accomplished in one or in severalinstallment deliveries. Refunding bonds constitute negotiableinstruments and are investment securities governed by the UniformCommercial Code (Chapter 8, Business & Commerce Code)notwithstanding any provisions of law or court decision to thecontrary and are legal and authorized investments for banks,savings banks, trust companies, savings and loan associations,insurance companies, fiduciaries, trustees, and guardians, andfor the sinking funds of cities, counties, school districts, andother political subdivisions or public agencies of this state.Refunding bonds are eligible to secure deposits of any publicfunds of the state and of any city, county, school district, andany other political subdivision or public agency of the state andare lawful and sufficient security for the deposits to the extentof their market value.(g) In lieu of the methods set forth in this Act, a metropolitanwater control and improvement district may refund bonds, notes,or other obligations in the manner provided by other general lawsof this state.(h) Notice of intention to issue refunding bonds shall bepublished by the metropolitan water control and improvementdistrict at least once a week for two consecutive weeks in anewspaper of general circulation within the metropolitan watercontrol and improvement district at least 15 days before themeeting of the governing body at which it is proposed to issuesuch bonds. At any time prior to the issuance of the bonds, if apetition signed by not less than 10 percent of the qualifiedvoters of the metropolitan water control and improvement districtis filed with the metropolitan water control and improvementdistrict calling for a referendum on the refunding bond issue,the governing body shall, at its next meeting, order an electionto be held within the metropolitan water control and improvementdistrict to determine whether or not the bonds shall be issued.The election shall be held in the manner prescribed by Chapter1251, Government Code, for the issuance of municipal bonds.Creation of SubdistrictsSec. 3. (a) The Texas Water Commission may create subdistrictsover designated territory within the boundaries of metropolitanwater control and improvement districts as provided by thissection.(b) A petition that contains the substance of the requirements ofSections 51.013 and 51.014, Water Code, shall be filed with theTexas Water Commission.(c) The Texas Water Commission shall have notice of the hearinggiven in the manner required by Section 51.018, Water Code.(d) The hearing shall be conducted in the manner provided bySection 51.020, Water Code, and the Texas Water Commission shallgrant or refuse the petition in the manner provided by Section51.021, Water Code, and the appeal from the decision of the TexasWater Commission shall be made in the manner provided by Sections51.022 through 51.025, Water Code, as amended. The Texas WaterCommission shall appoint five directors to serve as the governingbody of the subdistrict, each of whom shall meet thequalifications provided by Section 51.072, Water Code.(e) Within 60 days after a petition for the creation of asubdistrict is granted by the Texas Water Commission, the boardof directors of the subdistrict shall adopt an order callingelections within the boundaries of the subdistrict in the mannerprovided by Sections 51.221 through 51.224, Water Code, for thefollowing purposes:(1) to confirm the creation of the subdistrict in the mannerprovided by Sections 51.033 and 51.034, Water Code;(2) to authorize the issuance of bonds by the subdistrict or bythe metropolitan water control and improvement district on behalfof the subdistrict to be repaid by ad valorem taxes, revenues, orad valorem taxes and revenues derived by the subdistrict;(3) to authorize a tax within the boundaries of the subdistrictto make payments under a contract with the metropolitan watercontrol and improvement district to support refunding bonds ofthe metropolitan water control and improvement district inaccordance with the exclusions procedure provided by Section 5 ofthis Act;(4) to authorize a maintenance tax within the boundaries of thesubdistrict in the manner provided by Sections 51.360 and 51.361,Water Code; and(5) to elect a permanent board of directors for the subdistrictin the manner provided by Sections 51.074 and 51.075, Water Code.(f) The subdistrict shall sue and be sued in its own name andshall, until excluded from the boundaries of the metropolitanwater control and improvement district in accordance with theprovisions of Section 5 of this Act, have concurrent jurisdictionwith the metropolitan water control and improvement district thatis in the territory within the boundaries of the subdistrict andmay exercise any of the rights, powers, and authority of themetropolitan water control and improvement district within theboundaries of the subdistrict.(g) The ad valorem plan of taxation shall apply to eachsubdistrict, and there shall be no hearing for exclusions of landfrom the subdistrict necessary prior to the elections provided inthis section.(h) The subdistrict may be dissolved in the same manner as themetropolitan 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 theextent those laws are not inconsistent with this Act.Bonds of the SubdistrictSec. 4. (a) Before adopting the order calling elections providedby Subsection (e) of Section 3 of this Act, the engineers for thesubdistrict shall present a report to the governing body of thesubdistrict that conforms to Section 51.410, Water Code, withregard to the bonds to be issued by the subdistrict or by themetropolitan water control and improvement district on behalf ofthe subdistrict.(b) After the engineer's report is filed and approved, thegoverning body of the subdistrict shall order an election withinthe boundaries of the subdistrict to authorize the issuance ofbonds by the subdistrict or by the metropolitan water control andimprovement district on behalf of the subdistrict in accordancewith the provisions of this Act and Sections 51.411 and 51.412,Water Code.(c) Bonds authorized at an election within the subdistrict mayonly be repaid from ad valorem taxes imposed on all taxableproperty within the boundaries of the subdistrict or income,increment, and revenue derived from the ownership or operation ofany part of the assets of the subdistrict or any combination ofthe foregoing, and the metropolitan water control and improvementdistrict is not liable for the repayment of those bonds otherthan specifically set forth in this subsection.(d) Bonds issued by a subdistrict or by the metropolitan watercontrol and improvement district on behalf of the subdistrictshall be submitted to the attorney general for approval and tothe comptroller of public accounts for registration in the methodspecified by Sections 51.416 through 51.418, Water Code, andshall be subject to the provisions of Sections 51.419 through51.438, Water Code, as amended. Refunding bonds may be issued bya subdistrict as provided by Section 2 of this Act.(e) Bonds issued by a subdistrict or by the metropolitan watercontrol and improvement district on behalf of the subdistrict areinvestment securities under Chapter 726, Acts of the 67thLegislature, Regular Session, 1981 (Article 2529b-1, Vernon'sTexas Civil Statutes), and are bonds under Chapter 845, Acts ofthe 67th Legislature, Regular Session, 1981 (Article 717k-6,Vernon's Texas Civil Statutes), and are otherwise subject to theprovisions of general laws of this state relating to bonds of awater control and improvement district to the extent that thosegeneral laws are not inconsistent with this Act.Exclusion of Territory Within SubdistrictSec. 5. (a) Under Subsection (e) of Section 3 of this Act, thegoverning body of the subdistrict shall call an election withinthe subdistrict to coincide with the confirmation election, atwhich election a proposition shall be submitted to the qualifiedvoters that would authorize the subdistrict to enter into acontract with the metropolitan water control and improvementdistrict under which the subdistrict would levy an unlimited advalorem tax on all taxable property within the subdistrict torepay to the metropolitan water control and improvement districta portion of the metropolitan water control and improvementdistrict's total outstanding indebtedness, that portion to becalculated by multiplying the total outstanding indebtedness ofthe metropolitan water control and improvement district on thedate of the first payment under the contract by a percentageequal to the proportion of the total taxable property within themetropolitan water control and improvement district borne by thetotal taxable property within the subdistrict, as of the date ofthe next preceding tax roll.(b) The ballots in the election under Subsection (a) of thissection shall be printed to provide for voting for or against thefollowing proposition: "The execution of a contract and the levyof taxes to pay for the contract." A copy of the proposedcontract shall be available at the office of the metropolitanwater control and improvement district for inspection before theelection. The election shall otherwise be conducted in conformitywith Chapter 51, Water Code, as amended, for elections to approvea tax-supported contract with the United States.(c) If the proposition is approved at the election within asubdistrict, the governing board of the metropolitan watercontrol and improvement district shall, on receipt of a petitionthat conforms substantially to Section 51.694, Water Code, andthat describes all of the territory within the subdistrict,conduct a hearing within 30 days after receipt of the petition onthe exclusion of the subdistrict from the boundaries of themetropolitan water control and improvement district.(d) If the governing body of the subdistrict establishes at thehearing that the subdistrict has been created, has authorizedissuance of bonds by the subdistrict or by the metropolitan watercontrol and improvement district on behalf of the subdistrict,has authorized the tax-supported contract payment, and haselected a permanent board of directors, the governing board ofthe metropolitan water control and improvement district shall, atthe conclusion of the hearing, enter an order approving thecontract supported by a tax within the subdistrict, and excludingall land within the subdistrict from the boundaries of themetropolitan water control and improvement district contingentonly on the completion of the refunding bond issue.(e) Refunding bonds may be issued by a metropolitan water controland improvement district to implement the exclusion of landwithin a subdistrict under any terms and conditions that aredeemed advisable by the governing body of the metropolitan watercontrol and improvement district and shall only be subject to theinterest rate limitations imposed by the constitution and laws ofthis state. In the event refunding bonds are not issued by ametropolitan water control and improvement district within 30days after the hearing at which the subdistrict establishes allitems in Subsection (d) of this section, all property within thesubdistrict shall be deemed to be excluded from the boundaries ofthe metropolitan water control and improvement district on theexpiration of the 30th day.(f) Any subdistrict located within a service area as defined byan Environmental Protection Agency grant utilized by ametropolitan water control and improvement district to expand itswastewater treatment plant shall obtain wastewater treatmentservices to the extent of capacity provided with EnvironmentalProtection Agency funds from the wastewater treatment plantconstructed with the prior proceeds of the EnvironmentalProtection Agency grant in accordance with the terms of acontract approved by the governing bodies of the subdistrict andthe metropolitan water control and improvement district.(g) To reduce the cost of services to its residents andtaxpayers, the subdistrict shall utilize the employees,consultants, staff, and services of the metropolitan watercontrol and improvement district and shall reimburse themetropolitan water control and improvement district for all costsof furnishing those services. The services could be terminatedfor good cause. In the event of dispute, the subdistrict andmetropolitan water control and improvement district will obtainarbitration of the dispute.Water and Sewer RatesSec. 6. The metropolitan water control and improvement districtshall establish rates for all services to subdistricts aftertheir exclusion from the boundaries of the metropolitan watercontrol and improvement district that shall not exceed 150percent of the rates for similar service for residents of themetropolitan water control and improvement district.Election DatesSec. 7. All of the elections authorized by this Act may be heldon any day of the year other than a general election date andshall not be limited to the uniform election dates established bySection 9b, Texas Election Code, as amended (Article 2.01b,Vernon's Texas Election Code).Public PurposeSec. 8. The legislature finds and determines that this Act willfacilitate and advance the conservation and reclamation of thenatural resources of this state by permitting certain watercontrol and improvement districts to extend freshwater supply anddistribution facilities, storm water and flood controlfacilities, and sanitary sewage collection and treatmentfacilities into areas that have previously not received suchfacilities. The reclamation of land for development and use asresidential neighborhoods will be implemented and the health,welfare, and safety of residents of those neighborhoods will beadditionally protected.ConstructionSec. 9. The powers granted by this Act to metropolitan watercontrol and improvement districts shall be construed liberally toeffectuate the legislative intent and the purposes of this Act,and all those powers shall be broadly interpreted to effectuatethat intent and those purposes and not as a limitation of powers.SeverabilitySec. 10. If one or more of the sections, provisions, clauses, orwords of this Act or the application of those sections,provisions, clauses, or words to any situation or circumstanceshall for any reason be held to be invalid or unconstitutional,the invalidity or unconstitutionality shall not affect any othersections, provisions, clauses, or words of this Act or theapplication of those sections, provisions, clauses, or words toany other situation or circumstance, and it is intended that thisAct shall be severable and shall be construed and applied as ifthe invalid or unconstitutional section, provision, clause, orword 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.
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  • 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.

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