UTILITIES CODE
CHAPTER 164. JOINT OWNERSHIP OF ELECTRIC FACILITIES BY PUBLIC
ENTITIES
§ 164.001. JOINT OWNERSHIP OF ELECTRIC UTILITY
FACILITIES AUTHORIZED. (a) Political subdivisions may join
together to finance, construct, complete, acquire, or operate
electric utility facilities so that the facilities or an undivided
interest in the facilities is jointly owned by the political
subdivisions as cotenants or co-owners.
(b) The ownership shares in the facilities are those
approved by the governing bodies of the political subdivisions, as
set forth in an agreement authorized by the governing bodies.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 164.002. PUBLIC PURPOSE. The exercise by a political
subdivision of the authority granted by this chapter, including the
exercise of the power to issue bonds, notes, or other obligations to
accomplish the purposes of this chapter, and the performance of an
agreement entered into under this chapter are considered to be
additional public purposes of the political subdivision, without
regard to any express or implied limitation on the authority or
purposes of the political subdivision under any other general or
special law or charter provision.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 164.003. APPROVAL OF AGREEMENT BY ATTORNEY
GENERAL. (a) An agreement between political subdivisions
establishing an interest in electric utility facilities that is
executed under this chapter shall be submitted to the attorney
general in connection with any proceeding to finance the
contractual obligation by the issuance of bonds.
(b) An agreement submitted under Subsection (a) is
incontestable on approval as to legality by the attorney general.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 164.004. INCREASE IN OWNERSHIP SHARES. (a) An
agreement under this chapter may provide for a political
subdivision to increase its present or future ownership share of
the electric utility facilities by installment purchase payments
and for another political subdivision that is a party to the
agreement to transfer, in consideration of those payments, any
portion of its present or future ownership share of the facilities
to the purchasing political subdivision.
(b) A payment made by a political subdivision to acquire an
ownership interest is not treated as a maintenance and operating
expense but is treated as a capital cost as if the political
subdivision had issued bonds to construct or acquire the ownership
interest, unless otherwise specified in the agreement.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 164.005. CONTRACTUAL OBLIGATIONS AS LIEN ON SYSTEM
REVENUE. (a) If the electric utility facilities financed,
acquired, constructed, or completed are a part of a utility system
of a political subdivision, the obligation to make the contract
payments to acquire an ownership interest is a lien on the revenue
of the system on a parity with the outstanding bonds of the system
to the extent permitted in the ordinance or resolution authorizing
or the deed of trust or indenture securing the payment of the
outstanding bonds.
(b) If the ordinance or resolution authorizing or the deed
of trust or trust indenture securing the revenue bonds of a utility
system provides for the subsequent issuance of additional bonds or
the creation of a contractual obligation described by Section
164.004 and provides that the payments to be made for the security
or payment of the subsequent bonds or contractual obligation are to
be on a parity with the previously issued bonds or bonds then to be
issued, the political subdivision may, subject to any conditions
contained in that ordinance, resolution, deed of trust, or trust
indenture, authorize, issue, and sell additional bonds or incur the
contractual obligation in a different series payable from the
entire revenue of the utility system on a parity with the previously
issued bonds or bonds then to be issued and secured by a lien on the
revenue of the system on a parity with the lien securing the
previously issued bonds or bonds then to be issued. This subsection
applies without regard to whether the previously issued bonds:
(1) were issued before August 29, 1977; or
(2) are an original issue or a refunding issue.
(c) A political subdivision may pledge the revenue of a
utility system to pay contract payments to acquire an ownership
interest in an electric utility facility under this chapter.
(d) In this section, "utility system" includes a combined
utility system.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 164.006. CONSTRUCTION WITH OTHER LAWS. To provide
full authority for the execution of an agreement under this
chapter, this chapter applies to a municipality as if this chapter
were originally contained in Chapter 1501 or 1502, Government Code,
or Chapter 402, Local Government Code. This chapter prevails over
any charter provision or general or special law.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1420, § 8.405, eff. Sept. 1, 2001.
