CHAPTER 6904. AQUILLA WATER SUPPLY DISTRICT - Texas Statutes

SPECIAL DISTRICT LOCAL LAWS CODE

TITLE 6. WATER AND WASTEWATER

SUBTITLE B. FRESH WATER SUPPLY DISTRICTS

CHAPTER 6904. AQUILLA WATER SUPPLY DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 6904.001. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of the district.

(2) "Director" means a member of the board.

(3) "District" means the Aquilla Water Supply District.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.002. NATURE OF DISTRICT. The district is a

conservation and reclamation district created under Section 59,

Article XVI, Texas Constitution.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.003. FINDINGS OF BENEFIT AND PUBLIC PURPOSE. (a) All

land and taxable property in the city of Hillsboro will benefit

from the works and improvements of the district.

(b) The accomplishment of the purposes stated in this chapter is

for the benefit of the people of this state for the improvement

of their property and industries. The district, in carrying out

the purposes of this chapter, will be performing an essential

public function under the constitution.

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

920, Sec. 1.06, eff. April 1, 2009.

SUBCHAPTER B. DISTRICT TERRITORY AND ANNEXATIONS TO DISTRICT

TERRITORY

Sec. 6904.051. DISTRICT TERRITORY. (a) The boundaries of the

district are coextensive with the boundaries of the city of

Hillsboro as those boundaries existed on January 1, 1977, and as

the district territory may have been modified under:

(1) Sections 6904.052 and 6904.053 or their predecessor statute,

Section 6, Chapter 713, Acts of the 65th Legislature, Regular

Session, 1977;

(2) Subchapter J, Chapter 49, Water Code;

(3) Subchapter O, Chapter 51, Water Code, before September 1,

1995; or

(4) other law.

(b) An invalidity in the fixing of the boundaries of the city of

Hillsboro as they existed on January 1, 1977, does not affect the

boundaries of the district.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.052. ANNEXATION OF TERRITORY. (a) Territory may be

annexed to the district as provided by this section or by Section

6904.053.

(b) The board may annex territory or a municipality under this

section only if a petition requesting annexation is signed by 50

voters of the territory or municipality to be annexed, or a

majority of the registered voters of that territory or

municipality, whichever is fewer, and is filed with the board.

The petition must describe the territory to be annexed by metes

and bounds, or otherwise, except that if the territory is the

same as that contained in the boundaries of a municipality, the

petition is sufficient if it states that the territory to be

annexed is the territory contained in the municipal boundaries.

(c) If the board determines that the petition complies with

Subsection (b), that the annexation would be in the best interest

of the territory or municipality and the district, and that the

district will be able to supply water or other services to the

territory or municipality, the board shall:

(1) adopt a resolution stating the conditions, if any, under

which the territory or municipality may be annexed to the

district; and

(2) set a time and place to hold a hearing on the question of

whether the territory or municipality to be annexed will benefit

from:

(A) the improvements, works, or facilities owned or operated or

contemplated to be owned or operated by the district; or

(B) the other functions of the district.

(d) At least 10 days before the date of the hearing, notice of

the adoption of the resolution stating the time and place of the

hearing shall be published one time in a newspaper of general

circulation in the territory or municipality to be annexed. The

notice must describe the territory in the same manner in which

Subsection (b) requires the petition to describe the territory.

(e) Any interested person may appear at the hearing and offer

evidence for or against the annexation.

(f) The hearing may proceed in the order and under the rules

prescribed by the board and may be recessed from time to time.

(g) If, at the conclusion of the hearing, the board finds that

the property in the territory or municipality will benefit from

the present or contemplated improvements, works, or facilities of

the district, the board shall adopt a resolution making a finding

of the benefit and calling an election in the territory or

municipality to be annexed.

(h) In calling an election on the proposition for annexation of

the territory or municipality, the board may include, as part of

the same proposition or as a separate proposition, a proposition

for:

(1) the territory to assume its part of the tax-supported bonds

of the district then outstanding and those bonds previously voted

but not yet sold; and

(2) an ad valorem tax to be imposed on taxable property on the

territory along with the tax in the rest of the district for the

payment of the bonds.

(i) If a majority of the votes cast at the election are in favor

of annexation, the board by resolution shall annex the territory

to the district.

(j) An annexation under this section is incontestable except in

the manner and within the time for contesting elections under the

Election Code.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.053. ANNEXATION OF TERRITORY ANNEXED TO MUNICIPALITY

IN DISTRICT. (a) At any time after final passage of an

ordinance or resolution annexing territory to a municipality in

the district, the board may give notice of a hearing on the

question of annexing that territory to the district. The notice

is sufficient if it:

(1) states the date and place of the hearing; and

(2) describes the area proposed to be annexed or refers to the

annexation ordinance or resolution of the municipality.

(b) The notice must be published one time in a newspaper of

general circulation in the municipality not later than the 10th

day before the date set for the hearing.

(c) If, as a result of the hearing, the board finds that the

territory will benefit from the present or contemplated

improvements, works, or facilities of the district, the board

shall adopt a resolution annexing the territory to the district.

(d) After the territory is annexed to the district, the board

may call an election in the entire district to determine whether:

(1) the entire district will assume any tax-supported bonds then

outstanding and those bonds previously voted but not yet sold;

and

(2) an ad valorem tax for the payment of the bonds will be

imposed on all taxable property in the district.

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

920, Sec. 1.06, eff. April 1, 2009.

SUBCHAPTER C. BOARD OF DIRECTORS

Sec. 6904.101. COMPOSITION OF BOARD. (a) The district is

governed by a board of at least five directors. The directors

occupy numbered places on the board.

(b) For each municipality annexed to the district under Section

6904.052, two places are added to the board, except that the

number of directors may not exceed 11.

(c) Not more than five directors may reside in the corporate

limits of the city of Hillsboro.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.102. QUALIFICATIONS FOR OFFICE. (a) To be eligible

to serve as a director, a person must be:

(1) a qualified district voter; and

(2) a district resident.

(b) A director is eligible for reelection.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.103. DIRECTORS' ELECTION. Directors shall be elected

at an election called for that purpose by the board.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.104. REMOVAL FROM OFFICE. After reasonable notice and

a public hearing, the board may remove a director from office for

misfeasance, malfeasance, or wilful neglect of duty. Reasonable

notice and a public hearing are not required if the director to

be removed expressly waives the notice and hearing in writing.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.105. BOARD RESOLUTIONS; VOTING REQUIREMENTS. (a) The

district shall act through resolutions adopted by the board.

(b) All directors are entitled to vote.

(c) The affirmative vote of a majority of the quorum present is

necessary to adopt a resolution.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.106. OFFICERS AND ASSISTANTS. (a) The board shall

elect a president, vice president, secretary, and treasurer at

the first meeting of the newly constituted board after each

directors' election or at any time necessary to fill a vacancy.

(b) The board shall elect the president and vice president from

among the directors.

(c) The offices of secretary and treasurer:

(1) may be held by one person; and

(2) are not required to be held by a director.

(d) The board may appoint as assistant board secretary one or

more persons who are not directors.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.107. OFFICER DUTIES. (a) The board president shall

preside at board meetings and perform other duties prescribed by

the board.

(b) The board secretary is the official custodian of the

minutes, books, records, and seal of the board and shall perform

other duties and functions prescribed by the board. An assistant

board secretary may perform any duty or function of the board

secretary.

(c) The board treasurer shall perform duties and functions

prescribed by the board.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.108. MEETINGS. The board shall have regular meetings

at times specified by board resolution and shall have special

meetings when called by the board president or by any two

directors.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.109. PERSONAL LIABILITY OF DIRECTORS. A director is

not personally liable for any bond issued or contract executed by

the district.

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

920, Sec. 1.06, eff. April 1, 2009.

SUBCHAPTER D. POWERS AND DUTIES

Sec. 6904.151. DISTRICT POWERS. The district may exercise any

power necessary or appropriate to achieve the purposes of this

chapter, including the power to:

(1) sue and be sued, and plead and be impleaded, in its own

name;

(2) adopt an official seal;

(3) adopt and enforce bylaws and rules for the conduct of its

affairs;

(4) acquire, hold, use, and dispose of its receipts and money

from any source;

(5) acquire, own, rent, lease, accept, hold, or dispose of

property, or an interest in property, including a right or

easement, by purchase, exchange, gift, assignment, condemnation,

sale, lease, or otherwise, in performing district duties or

exercising district powers under this chapter;

(6) hold, manage, operate, or improve property;

(7) lease or rent any land, building, structure, or facility

from or to any person;

(8) sell, assign, lease, encumber, mortgage, or otherwise

dispose of property, or an interest in property, and release or

relinquish a right, title, claim, lien, interest, easement, or

demand, regardless of the manner in which acquired, and conduct a

transaction authorized by this subdivision by public or private

sale, with or without public bidding, notwithstanding any other

law;

(9) issue bonds, provide for and secure the payment of the

bonds, and provide for the rights of the holders of the bonds in

the manner and to the extent authorized by this chapter;

(10) request and accept an appropriation, grant, allocation,

subsidy, guarantee, aid, service, material, or gift from any

source, including the federal government, the state, a public

agency, or a political subdivision;

(11) operate and maintain an office;

(12) appoint and determine the duties, tenure, qualifications,

and compensation of district officers and employees, as well as

any agent, professional advisor, or counselor, including any

financial consultant, accountant, attorney, architect, engineer,

appraiser, or financing expert, considered necessary or advisable

by the board; and

(13) exercise any power granted by Chapter 30, Water Code, to

water districts created under Section 59, Article XVI, Texas

Constitution.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.152. PERMITS. (a) The district may obtain through

appropriate proceedings permits from the Texas Commission on

Environmental Quality.

(b) The district may acquire water appropriation permits from

owners of permits by contract or otherwise.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.153. GENERAL AUTHORITY OF PUBLIC AGENCIES AND

POLITICAL SUBDIVISIONS TO CONTRACT WITH DISTRICT. A public

agency or political subdivision of this state may enter into a

contract or agreement with the district, on terms agreed to by

the parties, for any purpose relating to the district's powers or

functions. Approval, notice, consent, or an election is not

required in connection with a contract or agreement.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.154. CONTRACTS TO SUPPLY WATER. (a) The district may

contract with public agencies, political subdivisions, and others

to supply water. The district may sell water inside and outside

the boundaries of the district.

(b) The district may contract with a public agency or political

subdivision for the rental or leasing of or for the operation of

the water production, water supply, water filtration or

purification, and water supply facilities of the entity on the

consideration agreed to by the district and the entity.

(c) A contract may be on terms and for the time agreed to by the

parties.

(d) A contract may provide that it will continue in effect until

bonds specified in it and refunding bonds issued in lieu of the

bonds are paid.

(e) The district may contract with the City of Hillsboro for the

operation of the district's water facilities by the city. An

election is not required in connection with this contract.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.155. SOURCES FOR WATER; ACQUISITION OF LAND; STORAGE

CAPACITY. (a) The district may acquire, construct, or develop

inside or outside the district sources for water, including

reservoirs or wells, and any work, plant, transmission line, or

other facility necessary or useful to develop, divert, impound,

store, drill for, pump, treat, or transport water, including

underground water, to the City of Hillsboro and others for

municipal, domestic, industrial, mining, oil flooding, or any

other useful purpose.

(b) The district may acquire land, or an interest in land,

inside or outside the district for any work, plant, or other

facility necessary or useful to divert, impound, store, drill

for, pump, treat, or transport water for municipal, domestic,

industrial, mining, oil flooding, or any other useful purpose.

(c) The district may lease, purchase, or otherwise acquire

rights in and to storage and storage capacity in any reservoir

constructed or to be constructed by any person or from the United

States.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.156. CONSTRUCTION CONTRACTS. (a) The district may

award a construction contract that requires an expenditure of

more than $5,000 only after publication of notice to bidders once

each week for two weeks in a newspaper of general circulation in

the district.

(b) The notice is sufficient if it states:

(1) the time and place for opening the bids;

(2) the general nature of the work to be done;

(3) the material, equipment, or supplies to be purchased; and

(4) where the terms of bidding and copies of the plans and

specifications may be obtained.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.157. CONVEYANCE OF LAND TO DISTRICT. A public agency

or political subdivision of this state may lease, sell, or

otherwise convey its land or an interest in its land to the

district for any consideration that the parties agree is

adequate. Approval, notice, consent, or an election is not

required in connection with a conveyance, contract, or agreement.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.158. DISPOSAL OF PROPERTY. Subject to the terms of a

resolution or deed of trust authorizing or securing bonds issued

by the district, the district may sell, lease, rent, trade, or

otherwise dispose of property under terms considered by the board

to be consistent with district purposes.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.159. EMINENT DOMAIN. (a) To carry out a power

provided by this chapter, the district may exercise the power of

eminent domain to acquire the fee simple title to land, or any

other interest in land, and other property and easements, inside

or outside the district, including land or an interest in land

needed for:

(1) a well; or

(2) a reservoir, dam, or flood easement above the probable

high-water line around a reservoir.

(b) The district must exercise the power of eminent domain in

the manner provided by Chapter 21, Property Code.

(c) The district is a municipal corporation for the purposes of

Chapter 21, Property Code.

(d) The board shall determine the amount and the type of

interest in land, other property, or easements to be acquired

under this section.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.160. COST OF RELOCATING OR ALTERING PROPERTY. (a) In

this section, "sole expense" means the actual cost of the

lowering, rerouting, or change in grade or alteration of

construction required under Subsection (b) to provide a

comparable replacement without enhancing the facility, after

deducting the net salvage value derived from the old facility.

(b) If the district's exercise of its eminent domain, police, or

other power requires relocating, raising, lowering, rerouting,

changing the grade of, or altering the construction of any

railroad, electric, transmission, telegraph, or telephone line,

conduit, pole, property, facility, or pipeline, the action shall

be accomplished at the sole expense of the district.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.161. RIGHTS-OF-WAY; EASEMENTS. The district has all

necessary or useful rights-of-way and easements along, over,

under, and across all public, state, municipal, and county roads,

highways, and places for any of its purposes. The district shall

restore a facility used to its previous condition as nearly as

possible at the sole expense of the district.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.162. ELECTIONS. (a) The board shall call an election

required to be held under this chapter by adopting a resolution

stating:

(1) the date of the election;

(2) each place where the election will be held; and

(3) the proposition or propositions to be voted on.

(b) The board shall give notice of an election by publishing a

substantial copy of the resolution calling the election one time

not less than 10 days before the date set for the election in:

(1) a newspaper of general circulation in the district; and

(2) a newspaper of general circulation in the territory, if the

election is on the question of annexation of territory.

(c) The board shall adopt a resolution declaring the results of

the election.

(d) The board may combine one or more elections required to be

held by this chapter, including a maintenance tax and bond

election.

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

920, Sec. 1.06, eff. April 1, 2009.

SUBCHAPTER E. GENERAL FINANCIAL PROVISIONS

Sec. 6904.201. IMPOSITION OF TAX. (a) The district may impose

a tax, not to exceed 25 cents on each $100 valuation of taxable

property in the district, for:

(1) maintenance purposes, including money for planning,

maintaining, repairing, and operating all necessary plants,

works, facilities, improvements, appliances, and equipment of the

district;

(2) paying costs of proper services, engineering, and legal

fees; and

(3) organization and administrative expenses.

(b) The district may not impose a maintenance tax unless the tax

is approved by a majority of the voters voting at an election

held for that purpose.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.202. DEPOSITORY. (a) The board shall designate one

or more banks inside or outside the district to serve as the

depository for the district's money.

(b) District money shall be deposited in the depository

designated by the board, except that:

(1) bond proceeds and money pledged to pay bonds, to the extent

provided in a resolution or trust indenture authorizing or

securing district bonds, may be deposited with another bank or

trustee named in the bond resolution or trust indenture; and

(2) money shall be remitted to each paying agent for the payment

of principal of and interest on the bonds.

(c) To the extent that money in a depository bank or the trustee

bank is not insured by the Federal Deposit Insurance Corporation,

the money must be secured in the manner provided by law for the

security of municipal money.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.203. INVESTMENT OF DISTRICT MONEY. The board may

invest district money in obligations and make time deposits of

district money in a manner determined by the board or in the

manner permitted or required in a resolution or trust indenture

authorizing or securing district bonds.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.204. DISTRICT FACILITIES EXEMPT FROM TAXATION AND

ASSESSMENT. The district is not required to pay a tax or

assessment on its facilities or any part of its facilities.

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

920, Sec. 1.06, eff. April 1, 2009.

SUBCHAPTER F. BONDS

Sec. 6904.251. AUTHORITY TO ISSUE BONDS. (a) The district may

issue bonds to carry out any power conferred by this chapter.

The bonds must be authorized by a board resolution.

(b) The bonds may be payable from and secured by revenue or ad

valorem taxes, or both revenue and ad valorem taxes, of the

district, in the manner and under the terms of the resolution

authorizing the issuance of the bonds.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.252. FORM OF BONDS. District bonds must be:

(1) issued in the district's name;

(2) signed by the president or vice president; and

(3) attested by the secretary.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.253. MATURITY. District bonds must mature not later

than 40 years after the date of their issuance.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.254. ELECTION FOR BONDS PAYABLE FROM AD VALOREM TAXES.

(a) Bonds, other than refunding bonds, payable wholly or partly

from ad valorem taxes may not be issued unless authorized by a

majority of the district voters voting at an election.

(b) The board may issue bonds not payable wholly or partly from

ad valorem taxes without an election.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.255. BONDS SECURED BY REVENUE; ADDITIONAL BONDS. (a)

Bonds issued under this subchapter may be secured by a pledge of

all or part of the district's revenue, or by all or part of the

revenue of one or more contracts or other revenue or income

specified by board resolution or a trust indenture securing the

bonds. The pledge may reserve the right, under conditions

specified by the pledge, to issue additional bonds that will be

on a parity with or subordinate to the bonds then being issued.

(b) The district may issue bonds secured by both taxes and

revenue of the district described by Subsection (a).

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.256. BONDS PAYABLE FROM AD VALOREM TAXES. (a) If

bonds are issued payable wholly or partly from ad valorem taxes,

the board shall annually impose a tax on the taxable property in

the district in an amount sufficient to pay the principal of and

interest on the bonds when due.

(b) The district may adopt the rate of a tax imposed under

Subsection (a) after giving consideration to the money received

from the pledged revenue that may be available for payment of

principal and interest, to the extent and in the manner permitted

by the resolution authorizing the issuance of the bonds.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.257. ADDITIONAL SECURITY. (a) Bonds, including

refunding bonds, authorized by this subchapter that are not

payable wholly from ad valorem taxes may be additionally secured,

at the discretion of the board, by a deed of trust or mortgage

lien on physical property of the district, franchises, easements,

water rights and appropriation permits, leases, contracts, and

all rights appurtenant to the property, vesting in the trustee

power to:

(1) sell the property for the payment of the debt;

(2) operate the property; and

(3) take other action to further secure the bonds.

(b) A purchaser under a sale under the deed of trust lien, if

one is given:

(1) is the absolute owner of property, facilities, and rights

purchased; and

(2) is entitled to maintain and operate the property,

facilities, and rights.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.258. TRUST INDENTURE. (a) A bond issued under this

subchapter, including a refunding bond, that is not payable

wholly from ad valorem taxes may be additionally secured by a

trust indenture. The trustee may be a bank with trust powers

located inside or outside the state.

(b) A trust indenture, regardless of the existence of the deed

of trust or mortgage lien on the property, may:

(1) provide for the security of the bonds and the preservation

of the trust estate in the manner prescribed by the board;

(2) provide for amendment or modification of the trust

indenture;

(3) provide for the issuance of bonds to replace lost or

mutilated bonds;

(4) condition the right to spend district money or sell district

property on the approval of a licensed engineer selected as

provided by the trust indenture; and

(5) provide for the investment of district money.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.259. CHARGES FOR DISTRICT SERVICES. (a) If district

bonds payable wholly from revenue are issued, the board shall set

and revise the rates of compensation for water sold and services

provided by the district. The rates must be sufficient to:

(1) pay the expense of operating and maintaining district

facilities;

(2) pay the principal of and interest on the bonds when due; and

(3) maintain the reserve fund and other funds as provided in the

resolution authorizing the bonds.

(b) If bonds payable partly from revenue are issued, the board

shall set the rate of compensation for water sold and any other

services provided by the district. The rate must be sufficient

to ensure compliance with the resolution authorizing the bonds or

the trust indenture securing the bonds.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.260. USE OF BOND PROCEEDS. (a) The district may set

aside an amount of proceeds from the sale of bonds issued under

this subchapter for:

(1) the payment of interest expected to accrue during

construction not to exceed three years;

(2) a debt service reserve fund; and

(3) other funds as may be provided in the resolution authorizing

the bonds or in the trust indenture.

(b) The district may use proceeds from the sale of the bonds to

pay any expense necessarily incurred in accomplishing the purpose

of the district, including any expense of issuing and selling the

bonds.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.261. APPOINTMENT OF RECEIVER. (a) On default or a

threatened default in the payment of principal of or interest on

bonds issued under this subchapter that are payable wholly or

partly from revenue, a court may, on petition of the holders of

outstanding bonds, appoint a receiver for the district.

(b) The receiver may collect and receive all district income,

except taxes, employ and discharge district agents and employees,

take charge of money on hand, except money received from taxes,

unless commingled, and manage the proprietary affairs of the

district without consent or hindrance by the board.

(c) The receiver may be authorized to sell or contract for the

sale of water or to renew those contracts with the approval of

the court that appointed the receiver.

(d) The court may vest the receiver with any other power or duty

the court finds necessary to protect the bondholders.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.262. REFUNDING BONDS. (a) The district may issue

refunding bonds to refund outstanding bonds issued under this

subchapter and interest on those bonds.

(b) Refunding bonds may:

(1) be issued to refund bonds of more than one series;

(2) combine the pledges for the outstanding bonds for the

security of the refunding bonds; or

(3) be secured by a pledge of other or additional revenue or

mortgage liens.

(c) The provisions of this subchapter regarding the issuance of

other bonds, their security, and the remedies of the holders

apply to refunding bonds.

(d) The comptroller shall register the refunding bonds on

surrender and cancellation of the bonds to be refunded.

(e) Instead of issuing bonds to be registered on the surrender

and cancellation of the bonds to be refunded, the district, in

the resolution authorizing the issuance of the refunding bonds,

may provide for the sale of the refunding bonds and the deposit

of the proceeds in a bank at which the bonds to be refunded are

payable. In that case, the refunding bonds may be issued in an

amount sufficient to pay the principal of and interest and any

required redemption premium on the bonds to be refunded to any

redemption date or to their maturity date, and the comptroller

shall register the refunding bonds without the surrender and

cancellation of the bonds to be refunded.

(f) An election is not required for refunding bonds.

(g) The district may also issue refunding bonds under any other

applicable law.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.263. LIMITATION ON RIGHTS OF HOLDERS. The resolution

authorizing the bonds or the trust indenture securing the bonds

may limit or qualify the rights of the holders of less than all

of the outstanding bonds payable from the same source to

institute or prosecute litigation affecting the district's

property or income.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.264. BONDS EXEMPT FROM TAXATION. A bond issued under

this subchapter, the transfer of the bond, and income from the

bond, including profits made on the sale of the bond, are exempt

from taxation in this state.

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

920, Sec. 1.06, eff. April 1, 2009.

Sec. 6904.265. DETACHMENT OF DISTRICT TERRITORY AFTER ISSUANCE

OF BONDS. Territory may not be detached from the district after

the issuance of bonds payable from revenue or taxes.

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

920, Sec. 1.06, eff. April 1, 2009.