CHAPTER 8104. BAYTOWN AREA WATER AUTHORITY - Texas Statutes

SPECIAL DISTRICT LOCAL LAWS CODE

TITLE 6. WATER AND WASTEWATER

SUBTITLE F. MUNICIPAL UTILITY DISTRICTS

CHAPTER 8104. BAYTOWN AREA WATER AUTHORITY

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 8104.001. DEFINITIONS. In this chapter:

(1) "Authority" means the Baytown Area Water Authority.

(2) "Board" means the authority's board of directors.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.002. NATURE OF AUTHORITY. The Baytown Area Water

Authority is a conservation and reclamation district in Harris

County created under Section 59, Article XVI, Texas Constitution.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.003. FINDING OF BENEFIT AND PUBLIC PURPOSE. (a) The

authority is created to serve a public use and benefit.

(b) All land and other property included in the authority and

land and property that feasibly may be served by the authority

will benefit from the works and projects to be accomplished by

the authority under powers conferred by Section 59, Article XVI,

Texas Constitution.

(c) The creation of the authority is essential to accomplish

the purposes of Section 59, Article XVI, Texas Constitution.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.004. STATE POLICY REGARDING WASTE DISPOSAL. The

powers and functions conferred on the authority are subject to

the state policy of encouraging the development and use of

integrated area-wide waste collection, treatment, and disposal

systems to serve the waste disposal needs of the state's

residents, if integrated systems can reasonably be provided for

an area, so as to avoid the economic burden on residents and the

effect on state water quality caused by the construction and

operation of numerous small waste collection, treatment, and

disposal facilities.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.005. OTHER DISTRICTS REQUIRED TO CONTRACT WITH

AUTHORITY. To encourage the policy provided by Section 8104.004

and to prevent wasteful duplication, each conservation and

reclamation district that is created in the authority after June

15, 1973, shall contract with the authority to provide facilities

and services that the authority is authorized to provide under

this chapter if the authority:

(1) has those facilities and services; or

(2) determines it can provide those facilities and services.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.006. RELATIONSHIP TO GULF COAST WASTE DISPOSAL

AUTHORITY. The rights, powers, privileges, and functions granted

to the authority under this chapter are subject to the powers

granted to the Gulf Coast Waste Disposal Authority in Chapter

409, Acts of the 61st Legislature, Regular Session, 1969 (Article

7621d-2, Vernon's Texas Civil Statutes), to provide disposal

systems.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.007. RELATIONSHIP TO OTHER DISTRICTS. This chapter

does not prevent the organization of or a change in the

boundaries of a conservation and reclamation district in the

authority as authorized by Section 52, Article III, or Section

59, Article XVI, Texas Constitution.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.008. RIGHTS, POWERS, PRIVILEGES, AND FUNCTIONS OF

MUNICIPAL UTILITY DISTRICTS. The authority has all of the

rights, powers, privileges, and functions provided by the general

laws of this state applicable to municipal utility districts,

including Chapter 54, Water Code.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

SUBCHAPTER B. DISTRICT TERRITORY

Sec. 8104.051. DISTRICT TERRITORY. (a) The authority is

composed of the territory described by Section 4, Chapter 600,

Acts of the 63rd Legislature, Regular Session, 1973, as that

territory may have been modified under:

(1) Section 8104.052 or 8104.053 or their predecessor statutes,

former Sections 7 and 8, Chapter 600, Acts of the 63rd

Legislature, Regular Session, 1973;

(2) Subchapter H, Chapter 54, Water Code;

(3) Subchapter J, Chapter 49, Water Code; or

(4) other law.

(b) The boundaries and field notes of the authority contained in

Section 4, Chapter 600, Acts of the 63rd Legislature, Regular

Session, 1973, form a closure. A mistake made in the field notes

or in copying the field notes in the legislative process does not

affect:

(1) the authority's organization, existence, or validity;

(2) the authority's right to issue revenue bonds or revenue

refunding bonds for a purpose for which the authority is created

or to pay the principal of and interest on the bonds; or

(3) the legality or operation of the authority or the board.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.052. ANNEXATION OF TERRITORY; BONDS. (a) Land may be

added or annexed to the authority under Subchapter J, Chapter 49,

and Subchapter H, Chapter 54, Water Code:

(1) without the consent of any municipality under Section

42.042, Local Government Code; and

(2) regardless of whether the authority has issued revenue

bonds.

(b) A change in the authority's boundaries under this section

does not affect the validity of the authority's bonds.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.053. EXCLUSION OF TERRITORY; HEARING. (a) The board

is not required to call or hold a hearing on the exclusion of

land or other property from the authority.

(b) The board on its own motion may call and hold one or more

hearings on the exclusion of land or other property from the

authority in the manner provided by general law.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

SUBCHAPTER C. BOARD OF DIRECTORS

Sec. 8104.101. COMPOSITION. The authority is governed by a

board of five directors appointed by the Baytown City Council.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.102. ELIGIBILITY TO SERVE. (a) One director must

reside outside the city limits of the city of Baytown but in the

authority's boundaries.

(b) A person serving as a director may not serve during the

person's term as a member of the Baytown City Council.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.103. TERMS. Directors serve staggered terms of two

years with the terms of the directors serving Positions 1 and 2

expiring September 1 of each even-numbered year and the terms of

the directors serving Positions 3, 4, and 5 expiring September 1

of each odd-numbered year.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.104. VACANCIES. The Baytown City Council shall fill

any vacancy occurring on the board by appointing a director for

the unexpired term.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.105. OFFICERS. (a) The board shall elect a

president, vice president, secretary, and any other officers the

board considers necessary at the board's first meeting:

(1) in September of each year; or

(2) after the annual vacancies are filled as provided by this

subchapter and the newly appointed directors are qualified.

(b) When the president is absent or fails or declines to act,

the vice president shall perform all duties and exercise all

power this chapter or general law gives the president.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.106. DIRECTOR'S BOND. (a) A director shall execute a

bond for $5,000 conditioned on the faithful performance of the

director's duties.

(b) The bond must be recorded in a record kept for that purpose

in the authority's office.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.107. VOTING REQUIREMENT. The concurrence of a

majority of the directors who are present and voting at a board

meeting is sufficient for matters relating to the authority's

business, including:

(1) letting construction work and related matters; and

(2) purchasing existing facilities.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.108. SIGNATURE FOR BOARD ACTIONS. An order adopted or

other action taken at a board meeting at which the president is

absent may be signed by:

(1) the vice president; or

(2) the president with board authorization.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

SUBCHAPTER D. OTHER ADMINISTRATIVE PROVISIONS

Sec. 8104.151. GENERAL MANAGER. (a) The city manager of the

City of Baytown is the authority's general manager.

(b) If the position of city manager is abolished, the chief

executive officer of the City of Baytown or the officer's

designee is the authority's general manager.

(c) The authority's general manager serves without compensation

paid by the board.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.152. POWERS AND DUTIES OF GENERAL MANAGER. (a) The

general manager is the authority's chief executive officer.

(b) The general manager, under policies established by the

board, shall:

(1) administer the board's directives;

(2) keep the authority's records, including minutes of board

meetings;

(3) coordinate with state, federal, and local agencies;

(4) develop plans and programs for the board's approval;

(5) formulate a budget for the authority's fiscal year, as

provided by this chapter, subject to the approval of the board

and the Baytown City Council;

(6) hire, supervise, train, and discharge the authority's

employees;

(7) contract for or retain technical, scientific, legal, fiscal,

and other professional services; and

(8) perform other duties assigned by the board.

(c) At the board's direction, the general manager may execute a

contract, including a construction contract, the board enters

into for the authority.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.153. BOND OF GENERAL MANAGER AND CERTAIN EMPLOYEES.

(a) The general manager and each employee of the authority

charged with the collection, custody, or payment of the

authority's money shall execute a fidelity bond.

(b) The board must approve the form, amount, and surety of each

bond.

(c) The authority shall pay the premium on each bond.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.154. CONTRACT WITH CITY OF BAYTOWN FOR ADMINISTRATIVE

FUNCTIONS. (a) In this section, "administrative functions" has

the meaning assigned by Section 791.003, Government Code.

(b) The authority shall offer to enter into an interlocal

contract under Chapter 791, Government Code, with the City of

Baytown for the performance of administrative functions.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

SUBCHAPTER E. POWERS AND DUTIES

Sec. 8104.201. WATER SUPPLY AND DISTRIBUTION. The authority

may:

(1) acquire surface water or groundwater supplies from sources

in or outside of the authority; and

(2) conserve, store, transport, treat, purify, distribute, sell,

and deliver surface water or groundwater to a public or private

corporation, a political subdivision of this state, or any other

person in or outside of the authority.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.202. FACILITIES FOR WATER TRANSPORTATION AND

DISTRIBUTION. (a) The authority may construct, maintain, and

operate a canal, lateral, ditch, levee, pipeline, or other

facility to transport and distribute water, together with a

service road or other facility incidental to or designed for use

in connection with transportation and distribution of water,

under, along, and across a:

(1) railroad;

(2) railroad right-of-way;

(3) canal;

(4) stream;

(5) pipeline;

(6) utility line;

(7) street or alley in a municipality, subject to reasonable

regulation by the municipality; or

(8) public road or highway.

(b) In crossing a facility described by Subsection (a), the

authority:

(1) may not impair the use of the facility; and

(2) shall promptly restore the facility to its former condition

of usefulness.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.203. WASTE SERVICES. The authority may collect and

transport the domestic, industrial, or communal waste of an

entity described by Section 8104.201(2), for the purposes

provided by Chapter 30, Water Code, or for other purposes.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.204. CONTRACTS. (a) The authority may:

(1) contract with a public or private corporation, a political

subdivision of this state, including the City of Baytown, or any

other person, on terms the board considers desirable, fair, and

advantageous, for the performance of the authority's rights and

powers under this chapter; and

(2) contract with another person to transport that person's

water.

(b) Before the authority enters into a contract under this

section, other than a contract between the authority and the City

of Baytown, the Baytown City Council must approve the contract.

(c) The period of a contract under Subsection (a)(1) may not

exceed 40 years. The contract may provide that it continues in

effect until bonds issued by the authority to finance the cost of

facilities authorized by this chapter and refunding bonds issued

in place of those bonds are paid.

(d) Section 552.014, Local Government Code, applies to any

contract between the authority and a municipality, including the

City of Baytown.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Amended by:

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

885, Sec. 3.77(23), eff. April 1, 2009.

Sec. 8104.205. CONSENT REQUIRED FOR WASTE TREATMENT AND DISPOSAL

FACILITIES. Before acquiring or constructing a waste treatment

or disposal facility, the authority must obtain the consent of

the:

(1) Gulf Coast Waste Disposal Authority; or

(2) Texas Commission on Environmental Quality, if the consent of

the Gulf Coast Waste Disposal Authority is unreasonably withheld

or delayed.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.206. ACQUISITION OF WATER RIGHTS NOT PREVENTED. This

chapter does not prevent the authority from acquiring water

rights under any law or permit if the acquisition is approved by

order or later permit from the Texas Commission on Environmental

Quality.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.207. ELECTION NOT REQUIRED TO APPROVE CONTRACTS. The

authority is not required to hold an election to approve a

contract with a political subdivision for services described by

this chapter.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.208. COST OF RELOCATING PROPERTY. (a) In this

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

raising, lowering, rerouting, changing the grade of, or altering

the construction of a facility described by Subsection (b) in

providing comparable replacement without enhancement of the

facility, after deducting from that cost the net salvage value of

the old facility.

(b) If the authority, in the exercise of the power of eminent

domain, the power of relocation, or any other power granted under

this chapter, makes necessary the relocating, raising, rerouting,

changing the grade of, or altering the construction of a highway,

a railroad, an electric transmission line, a pipeline, or a

telephone or telegraph property or facility, the necessary

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

alteration of construction shall be accomplished at the sole

expense of the authority.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

SUBCHAPTER F. GENERAL FINANCIAL PROVISIONS

Sec. 8104.251. FISCAL YEAR. The authority's fiscal year is from

October 1 to September 30, unless the board changes the fiscal

year.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.252. AUTHORITY DEPOSITORY. (a) With the prior

approval of the Baytown City Council, the board shall select one

or more banks in this state to act as depository for the

authority's money.

(b) To the extent that money in a depository bank is not insured

by the Federal Deposit Insurance Corporation, the money shall be

secured in the manner provided by law for the security of the

City of Baytown's money.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.253. INVESTMENT AUTHORITY. The authority may invest:

(1) money held in any sinking fund, reserve fund, or other fund;

or

(2) money not required for immediate use or disbursement in the

securities as provided by this chapter.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.254. RENTS, RATES, FEES, AND CHARGES. (a) The

authority may:

(1) set, charge, alter, and collect a reasonable rent, rate,

fee, or other charge for the use of a facility or for a service

rendered by the authority; and

(2) provide for the imposition of a reasonable penalty for a

delinquent rent, rate, fee, or charge.

(b) The authority shall set, charge, alter, and collect rent,

rates, fees, and charges in amounts that are sufficient to

produce revenue adequate to fulfill an agreement with the holders

of bonds or notes issued under this chapter.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.255. GRANTS AND ASSISTANCE. The authority may:

(1) apply for, accept, and administer a grant, loan, or other

assistance from the United States, this state, or another state

to carry out the purpose of this chapter; and

(2) enter into an agreement as provided by the authority in

connection with the grant, loan, or other assistance.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.256. PROPERTY TAX PROHIBITION. The authority may not:

(1) impose a tax on real, personal, or mixed property; or

(2) issue a bond or create debt payable directly from ad valorem

taxes imposed by the authority.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

SUBCHAPTER G. BONDS AND NOTES

Sec. 8104.301. BORROWING THROUGH BONDS OR NOTES. (a) After the

action is approved by the Baytown City Council, the authority may

borrow money to carry out any power granted to the authority by:

(1) issuing and selling revenue bonds or negotiable or

nonnegotiable notes payable from and secured by the sources

described in this chapter; and

(2) delivering the bonds or notes to the United States or to

this state when it is determined by the board to be in the best

interest of the authority.

(b) The bonds or notes must be authorized by a board resolution

in which a majority of the board's membership concurs.

(c) The board must provide the terms of the bonds or notes and

the rights of the holders of the bonds or notes.

(d) The Baytown City Council must approve the bonds or notes

before they are issued.

(e) The board is not required to hold an election before issuing

and selling revenue bonds.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.302. REFUNDING BONDS. (a) After the action is

approved by the Baytown City Council, the board by resolution may

authorize the issuance of refunding bonds or notes to refund

outstanding bonds or notes issued under this chapter and their

accrued interest.

(b) The authority may:

(1) sell the refunding bonds or notes and use the proceeds to

retire the outstanding bonds or notes; or

(2) exchange the refunding bonds or notes for the outstanding

bonds or notes.

(c) To the extent the provisions of this chapter relating to

original bonds or notes may be made applicable, those provisions

apply to:

(1) the issuance of the refunding bonds or notes;

(2) the maturity of the refunding bonds or notes;

(3) the rights of the bondholders; and

(4) the authority's duties regarding refunding bonds or notes.

(d) The authority also may refund bonds or notes under any

general law of this state.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.303. FORM OF BONDS; LIABILITY. (a) Bonds or notes,

including a coupon attached to a bond or note, issued under this

chapter shall:

(1) be signed by the board's president or vice president; and

(2) be attested by the board's secretary.

(b) A director, a board officer, or a person who executes a

bond, note, or coupon for the authority is not liable personally

on the bond, note, or coupon by participating in its issuance.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.304. MATURITY. Bonds or notes issued under this

chapter must mature within 40 years.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.305. RESOLUTION AND TRUST INDENTURE PROVISIONS. (a)

A board resolution authorizing bonds or notes or a trust

indenture securing bonds or notes may contain provisions that:

(1) to secure the payment of the bonds or notes, pledge all or a

designated part of the authority's revenue and receipts from the

planning, financing, ownership, operation, or leasing of, or

otherwise in connection with, a specified facility or asset, or

that are otherwise connected to the facility or asset;

(2) to secure the payment of the bonds or notes, pledge all or

part of the authority's assets, including an obligation acquired

by the authority;

(3) relate to the use and disposition of rents, rates, fees, and

other charges made or received by the authority;

(4) pledge to set, charge, alter, and collect rents, rates,

fees, or other charges for a designated facility or asset that

will produce revenue adequate to:

(A) pay all expenses necessary to operate and maintain the

designated facility or asset;

(B) pay the interest on and principal of all bonds or notes

issued and payable from the revenues and receipts as the interest

and principal become due and payable;

(C) pay all sinking fund, reserve fund, or other fund payments

agreed to be made related to any bonds or notes payable out of

the revenues and receipts as the payments become due and payable;

and

(D) fulfill the terms of an agreement made with:

(i) the bond or note holders; or

(ii) a person on behalf of the bond or note holders;

(5) set aside the reserves or sinking funds and that provide for

the regulation and disposition of the reserves or sinking funds;

(6) limit the purpose to which the proceeds from the sale of the

bonds or notes may be applied and that pledge the proceeds to

secure the payment of the bonds or notes;

(7) limit the issuance of additional bonds and the refunding of

outstanding or other bonds or notes;

(8) relate to the acquisition, construction, improvement,

operation, extension, enlargement, maintenance, or repair of a

facility or asset and the duties of the authority relating to the

facility or asset;

(9) relate to the procedure by which the terms of an agreement

with the bond or note holders may be amended or abrogated, the

amount of bonds or notes the holders of which are required to

give consent to, and the manner in which the consent may be

given;

(10) limit the amount of money to be spent by the authority for

administrative or other expenses;

(11) vest in a trustee or other fiduciary the property, rights,

powers, and duties in trust as the authority determines,

including the rights, powers, and duties of the trustee appointed

by the bond or note holders under this chapter;

(12) abrogate the right of the bond or note holders to appoint a

trustee under this chapter or limit the rights, powers, and

duties of the trustee;

(13) provide for the management, operation, and control of a

specified authority facility or asset by a board of trustees to

be named in the resolution or trust indenture and that specify:

(A) the terms of office of the board of trustees;

(B) the powers and duties of the board of trustees;

(C) the manner of exercising those powers and duties;

(D) the appointment of successors; and

(E) all matters relating to the organization and duties of the

board of trustees;

(14) govern the issuance of bonds or notes to replace lost,

stolen, or mutilated bonds or notes; and

(15) relate to any other matter that affects the security or

protection of the:

(A) bonds or notes; or

(B) bond or note holders.

(b) A provision authorized by this section that is contained in

the resolution or trust indenture is a part of the agreement with

the holders of the bonds or notes.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.306. SECURITY FOR BONDS OR NOTES. (a) Bonds or notes

of the authority and the interest on the bonds or notes may be

secured by and payable only from the sources authorized by this

chapter.

(b) The bonds or notes may be secured by and payable from a

pledge of all or part of:

(1) the authority's revenues, receipts, or assets; or

(2) the revenues of one or more past or future leases or other

contracts.

(c) A pledge made under this section must be specified:

(1) by the resolution authorizing the bonds or notes; or

(2) by the trust indenture or other instrument securing the

bonds or notes.

(d) The lien of the pledge or security instrument is binding

against all parties having claims of any kind against the

authority, including tort or contract claims, regardless of

whether the parties have notice of the lien.

(e) A pledge made under this section may reserve to the

authority the right, under conditions the pledge specifies, to

issue additional bonds or notes that will be on a parity with or

subordinate to the bonds or notes then being issued.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.307. TRUST INDENTURE. (a) Bonds or notes, including

refunding bonds, authorized by this chapter may be additionally

secured by a trust indenture under which the trustee may be a

bank that has trust powers. The bank may be located in or

outside of this state.

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

interest in the facilities or assets, the trust indenture may:

(1) contain any provision prescribed by the authority and the

Baytown City Council for the security of the bonds or notes and

the preservation of the trust estate;

(2) provide for amendment or modification of the trust

indenture;

(3) condition the right to spend authority money or to sell the

authority's facilities or assets on approval of a licensed

engineer selected as provided by the trust indenture; and

(4) include any other provision to protect and enforce the

rights and remedies of the bond or note holders as may be

reasonable and proper.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.308. ADDITIONAL SECURITY. At the discretion of the

authority and the Baytown City Council, bonds or notes issued

under this chapter may be secured additionally by a mortgage or a

deed of trust lien or security interest on facilities or assets

of the authority and all real property, franchises, easements,

leases, contracts, and rights appurtenant to the properties that

vest in the trustee the power to:

(1) sell the facilities or assets for payment of the debt;

(2) operate the facilities or assets; and

(3) take any other action to secure the bonds or notes.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.309. REVIEW AND APPROVAL OF CONTRACTS RELATING TO

BONDS OR NOTES. (a) If bonds or notes issued under this chapter

state that the bonds or notes are secured by a pledge of the

revenues and receipts of a lease or other contract made between

the authority and a person, a copy of the lease or contract may

be submitted to the attorney general with the bonds or notes.

(b) If the attorney general finds that the bonds or notes have

been authorized and that the lease or contract has been made in

accordance with law, the attorney general shall approve the bonds

or notes and the lease or contract.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.310. BONDS AND NOTES EXEMPT FROM TAXATION. A bond or

note issued under this chapter, the interest on the bond or note,

and the profit from the sale of the bond or note are exempt from

taxation by this state or a political subdivision of this state.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.311. BOND OR NOTE SALE PROCEEDS. Proceeds from the

sale of bonds or notes issued by the authority shall be:

(1) deposited in a depository bank; and

(2) paid out under the terms to which the authority and the

purchasers agree.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.312. INVESTMENT OF FUNDS AND USE OF PROCEEDS. (a)

The authority may direct the investment of money in the funds

created by the resolution authorizing bonds or notes or by a

trust indenture or other instrument securing bonds or notes

issued under this chapter.

(b) The authority may set aside proceeds from the sale of bonds

or notes for payment into:

(1) the interest and sinking fund until completion of

construction and until adequate revenues and receipts are

available from operations to pay principal and interest; or

(2) reserve funds.

(c) The authority may provide, in the resolution authorizing the

bonds or notes or in the trust indenture or other instrument, for

setting aside the proceeds as described by Subsection (b).

(d) Proceeds from the sale of bonds or notes may be used to pay

all expenses of issuing and selling the bonds or notes.

(e) Proceeds from the sale of bonds or notes and money in funds

created in connection with the bonds or notes may be invested:

(1) in direct or indirect obligations of or obligations

unconditionally guaranteed by the United States maturing in the

manner that may be specified by the resolution authorizing the

bonds or notes or by the trust indenture or other instrument

securing the bonds or notes; or

(2) in bank or trust company certificates of deposit that are

secured by the obligations described in Subdivision (1).

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.313. APPOINTMENT OF RECEIVER. (a) The resolution

authorizing the issuance of the bonds or notes, or the trust

indenture or other instrument securing the bonds or notes, may

provide that, on petition of the holders of outstanding bonds or

notes, a court may appoint a receiver for the authority:

(1) on default in the payment of the principal of or interest

on bonds or notes; or

(2) under the conditions stated in the resolution, trust

indenture, or other instrument, on a threatened default in the

payment of the principal of or interest on bonds or notes.

(b) The receiver may collect and receive pledged revenues and

receipts.

(c) The resolution, trust indenture, or other instrument may

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

outstanding bonds or notes payable from the same source to

institute or prosecute litigation affecting the authority's

properties or revenues.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.314. ENFORCEMENT. The following may be enforced in a

court by mandamus or other appropriate proceeding:

(1) payment of bonds or notes according to the term and tenor;

(2) performance of agreements with the holders of bonds or notes

or any person on their behalf; and

(3) performance of official duties prescribed by this chapter in

connection with bonds or notes.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.315. STATE PLEDGE REGARDING RIGHTS AND REMEDIES OF

BOND OR NOTE HOLDERS. (a) The state pledges to and agrees with

the holders of bonds or notes issued under this chapter that the

state will not limit or alter the rights vested in the authority

to fulfill the terms of agreements made with the holders that are

consistent with this chapter or impair the rights and remedies of

the holders until the following are fully discharged:

(1) the bonds or notes;

(2) interest on the bonds or notes;

(3) interest on any unpaid installments of interest; and

(4) all costs and expenses for which the authority is liable

related to an action or proceeding by or on behalf of the

holders.

(b) The authority may include the state's pledge and agreement

under Subsection (a) in an agreement with the holders of the

bonds or notes.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.

Sec. 8104.316. LIMITATION ON RIGHT OF BOND OR NOTE HOLDERS. The

purchasers and holders of any bonds or notes may not demand

payment from revenues, receipts, or assets of the authority

except those pledged to the payment of the bonds or notes.

Added by Acts 2005, 79th Leg., Ch.

729, Sec. 1.06, eff. April 1, 2007.