WATER CODE
CHAPTER 20. TEXAS WATER RESOURCES FINANCE AUTHORITY
SUBCHAPTER A. GENERAL PROVISIONS
§ 20.001. LEGISLATIVE PURPOSE AND POLICY. (a) The
legislature declares that it is the policy of the state to:
(1) encourage and assist in the conservation and
development of the water resources of the state for all useful and
lawful purposes by the acquisition, improvement, extension, or
construction of water resource conservation and development
projects;
(2) encourage the optimum development of the feasible
sites available for the construction or enlargement of dams and
reservoirs for conservation of the public water of the state held in
trust for the use and benefit of the public through assistance and
participation in the acquisition and development of water storage
facilities and systems or works necessary for filtration,
treatment, and transportation of water from storage to points of
treatment, filtration, and distribution;
(3) aid in the protection of the quality of the water
resources of the state by encouraging and assisting in the
financing of water quality enhancement projects; and
(4) aid in flood control, drainage, subsidence
control, recharge, chloride control, agricultural soil and water
conservation, and desalinization by encouraging and assisting in
the financing of projects necessary to those purposes.
(b) The legislature finds that existing mechanisms for
implementing the policies stated in Subsection (a) of this section
may be enhanced by financing as provided in this subchapter.
(c) The legislature finds that to enhance the ability of the
state to aid in the accomplishment of the purposes stated in
Subsection (a) of this section, it is necessary to create a water
resources finance authority for the purpose of increasing the
availability of financing by purchasing political subdivision
bonds, and the legislature declares that the creation of the
authority for this purpose is a public purpose and a use for which
public money may be borrowed, spent, advanced, loaned, granted, or
appropriated, and that this use serves a public purpose in
improving or otherwise benefitting the people of this state. Also,
the legislature determines and declares the necessity of enacting
this subchapter is in the public interest.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.002. DEFINITIONS AND CONSTRUCTION. In this
subchapter:
(1) "Authority" means the Texas Water Resources
Finance Authority.
(2) "Authorized investments" means:
(A) direct obligations of or obligations the
principal of and interest on which are guaranteed by the United
States;
(B) direct obligations of or participation
certificates guaranteed by the Federal Intermediate Credit Bank,
Federal Land Banks, Federal National Mortgage Association, Federal
Home Loan Banks, and Banks for Cooperatives;
(C) direct obligations of or obligations the
principal of and interest on which are guaranteed by the State of
Texas;
(D) bonds of cities, counties, and other
political subdivisions of this state, other than bonds issued by a
political subdivision to finance a project covered by this chapter;
(E) certificates of deposit of state and national
banks that satisfy the requirements of Section 2.015, Chapter 240,
Acts of the 69th Legislature, Regular Session, 1985 (Article
4393-1, Vernon's Texas Civil Statutes), and the rules of the
comptroller and if the authority or a financial institution acting
solely as agent for the authority possesses the collateral securing
those deposits; and
(F) direct security repurchase agreements made
only with state or national banks domiciled in the state under which
the authority buys, holds in its possession or the possession of a
financial institution acting solely as agent for the authority for
a specified time, and then sells back any of the following
securities, obligations, or participation certificates:
(i) United States government securities;
(ii) direct obligations of or obligations
the principal of and interest on which are guaranteed by the United
States; and
(iii) direct obligations of or
participation certificates guaranteed by the Federal Intermediate
Credit Bank, Federal Land Banks, Federal National Mortgage
Association, Federal Home Loan Banks, and Banks for Cooperatives.
(3) "Board" means the board of directors of the
authority.
(4) "Bond" means any type of interest-bearing
obligation, including any bond, note, bond anticipation note, or
other evidence of indebtedness under this chapter.
(5) "Development board" means the Texas Water
Development Board.
(6) "Director" means a member of the board.
(7) "Political subdivision" means a city, county, or
other body politic or corporate of the state, including any
district or authority created under Article III, Section 52, or
Article XVI, Section 59, of the Texas Constitution, a state agency,
an entity created by an interstate compact to which the state is a
party, and any nonprofit water supply corporation created and
operating under Chapter 67.
(8) "Political subdivision bonds" means bonds, notes,
or other securities that were issued by and any debt or other
contractual obligations that were incurred by a political
subdivision for the purpose of financing or refinancing projects
for water resource development and conservation, water quality
enhancement, flood control, drainage, subsidence control,
recharge, chloride control, agricultural soil and water
conservation, desalinization, or any combination of these
purposes.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
Amended by Acts 1997, 75th Leg., ch. 891, § 3.21, eff. Sept. 1,
1997; Acts 1999, 76th Leg., ch. 62, § 18.63, eff. Sept. 1, 1999.
SUBCHAPTER B. ADMINISTRATIVE PROVISIONS
§ 20.011. CREATION OF AUTHORITY. (a) The Texas Water
Resources Finance Authority is created as a governmental entity and
a body politic and corporate.
(b) The exercise of the powers and duties by the authority
under this chapter constitutes an essential public purpose of the
state in promoting the general welfare of the state and its
citizens.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.012. BOARD OF DIRECTORS. (a) The authority is
governed by a board of directors composed of the six directors of
the development board.
(b) Each director serves on the board as an additional duty
to those required of a member of the development board.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.013. COMPENSATION; REIMBURSEMENT. The directors
are not entitled to receive compensation for their service on the
board but are entitled to be reimbursed for their expenses in
performing their powers and duties under this chapter.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.014. ORGANIZATION OF BOARD. (a) The board shall
select from its membership one person to serve as chairman and one
person to serve as vice-chairman.
(b) The person selected as chairman shall preside at
meetings of the board and perform other duties directed by the
board, and the vice-chairman shall preside at meetings of the board
in the absence of the chairman.
(c) The board shall select persons to serve as secretary and
treasurer for the authority. The persons selected as secretary and
treasurer are not required to be directors and the positions of
secretary and treasurer may be held by one person. The board also
may appoint assistant secretaries.
(d) The secretary is the custodian of the minutes, books,
records, and seal of the board, and the secretary and the treasurer
shall perform duties as directed by the board.
(e) The chairman, vice-chairman, secretary, and treasurer
shall be selected by the board at the first meeting of the board
following January 31 of each odd-numbered year.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.015. BOARD MEETINGS. (a) The board shall hold
regular meetings at times provided by its rules and shall meet at
least once each calendar year.
(b) The board may hold special meetings at the call of the
chairman or on request of three or more directors.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.016. RULES AND RESOLUTIONS. The board may adopt
rules that are necessary to carry out this chapter and may take
official action by adoption of a resolution or order.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.017. LIABILITY. A director or officer of the
authority is not liable for any bonds issued or contracts executed
by the authority.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.018. GENERAL FISCAL AUTHORITY. The board may
acquire, hold, invest and reinvest in authorized investments,
deposit, use, and dispose of the authority's revenues, income,
receipts, funds, and money from every source and may select its
depository or depositories, inside or outside the state, subject
only to this chapter and any covenants with respect to the
authority's bonds.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.019. PROPERTY TAX EXEMPT. (a) The property of the
authority, its income, and its operations are exempt from all taxes
and assessments imposed by the state and political subdivisions on
property acquired or used by the authority under this chapter.
(b) If the authority is dissolved, all of its rights and
properties vest in the state.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.020. FISCAL YEAR; ANNUAL AUDIT. (a) The
authority shall operate on a fiscal year beginning September 1.
(b) The state auditor may audit the authority's books and
accounts, based on a risk assessment performed by the state auditor
and subject to the legislative audit committee's approval of
including the audit in the audit plan under Section 321.013,
Government Code. The cost of an audit shall be paid by the
authority.
(c) A copy of the audit shall be filed with the governor and
with both houses of the legislature on or before January 1 of each
year, except if the audit is being made by the state auditor and is
not available by January 1, it shall be filed as soon as it is
available.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
Amended by Acts 2003, 78th Leg., ch. 785, § 50, eff. Sept. 1,
2003.
§ 20.021. AUTHORITY EXPENSES. (a) Expenses incurred
by the authority under this Act shall be paid solely from revenues
or funds provided or to be provided under this chapter.
(b) This chapter may not be construed to authorize the
authority to incur any indebtedness or liability on behalf of or
payable by the state.
(c) The authority may not accept and is not entitled to
receive any money appropriated by the state.
(d) The board shall use all available sources of revenue and
income to pay expenses of operation and maintenance of the
authority, to pay the premium, principal of and interest on bonds,
and to create and maintain any reserves or funds provided by
resolutions authorizing the issuance of bonds.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.022. SUITS. The authority may sue and be sued in
the courts of this state in the name of the authority, and the
courts shall take judicial notice of the creation of the authority.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.023. SEAL. The board may adopt a seal for the
authority.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
SUBCHAPTER C. POWERS AND DUTIES
§ 20.041. GENERAL POWERS AND DUTIES. The authority may
exercise any authority necessary or appropriate to carry out the
purposes of this chapter.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.042. GIFTS, GRANTS, ETC. The board may request and
accept for the authority grants, allocations, subsidies,
guaranties, aid, contributions, services, labor, materials, gifts,
and donations.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.043. CONTRACTS. The board on behalf of the
authority may enter into contracts with any person to carry out this
chapter.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.044. PURCHASE OF INSURANCE. The board may purchase
for the authority and pay premiums on insurance of any type, in any
amounts, and from any insurers the board considers advisable.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.045. CONTRACTS WITH DEVELOPMENT BOARD. The
authority may enter into contracts with the development board and
with consultants as necessary to perform the functions provided by
this chapter.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
SUBCHAPTER D. POLITICAL SUBDIVISION BONDS
§ 20.071. PURCHASE OF POLITICAL SUBDIVISION BONDS. The
board may purchase political subdivision bonds including bonds that
are acquired or owned by the development board.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.072. ACQUISITION OF CERTAIN DEVELOPMENT BOARD
BONDS. If the board agrees to purchase political subdivision bonds
from the development board that have not been purchased by the
development board at the time of the agreement, the board may pay
the purchase price for those bonds in exchange for the agreement of
the development board to transfer those bonds to the board at the
time the development board acquires them.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.073. PRICE AND TERMS OF PURCHASE. The board shall
purchase political subdivision bonds at prices and under terms the
board determines to be reasonable.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.074. REVENUE BONDS. (a) The board may issue
revenue bonds in the name of the authority to finance the cost of
acquisition of political subdivision bonds and to pay the cost of
bond issuance.
(b) The board may provide for payment of the premium,
principal of, and interest on revenue bonds by pledging all or part
of the revenue derived from political subdivision bonds acquired or
to be acquired by the authority or from other sources of funds
available to the authority.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.075. CONTRACT FOR OBTAINING COMPLIANCE WITH
POLITICAL SUBDIVISION BONDS. The board shall enter into a contract
with the development board for the development board to perform the
functions required to ensure that the political subdivisions pay
the debt service on political subdivision bonds and observe the
conditions and requirements set forth in those bonds.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.076. ENFORCEMENT OF POLITICAL SUBDIVISION
BONDS. (a) If there is a default in the payment of principal of or
interest on political subdivision bonds purchased by the authority
or any other default as defined in the proceedings or indentures
authorizing the issuance of the bonds, the attorney general shall
institute appropriate proceedings for mandamus or other legal
remedies to compel the political subdivision or its officers,
agents, and employees to cure the default by performing those
duties that they are legally obligated to perform.
(b) The proceedings shall be brought and venue shall be in a
district court of Travis County.
(c) This section is cumulative of any other rights or
remedies to which the board may be entitled.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
SUBCHAPTER E. BOND PROCEDURES
§ 20.101. ISSUANCE OF BONDS. For the issuance of bonds
under this chapter, the board may exercise the authority granted to
the governing body of an issuer with regard to issuance of
obligations under Chapter 1371, Government Code, to the extent that
it is not inconsistent with this chapter.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
Amended by Acts 2001, 77th Leg., ch. 1420, § 8.416, eff. Sept. 1,
2001.
§ 20.102. CONDITIONS FOR ISSUANCE OF BONDS. (a) Bonds
may be issued as various series and issues.
(b) Bonds issued by the authority may mature serially or
otherwise not later than 50 years after the date on which they are
issued.
(c) The bonds may bear interest at a rate or rates
determined in accordance with the resolution or order authorizing
the issuance of the bonds but not to exceed the net effective
interest rate authorized by Chapter 1204, Government Code.
(d) Rates of interest on bonds may be fixed, variable,
floating, adjustable, or otherwise.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
Amended by Acts 2001, 77th Leg., ch. 1420, § 8.417, eff. Sept. 1,
2001.
§ 20.103. PERIODIC DETERMINATION OF INTEREST. A bond
resolution or order may provide for the periodic determination of
interest rates without the board being required to give specific
approval.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.104. PERSONS DESIGNATED TO ACT AS AGENTS OF
BOARD. (a) A bond resolution or order may delegate to one or more
officers, employees, or agents designated by the board authority to
act on behalf of the board during the time bonds are outstanding to
fix dates, prices, interest rates, and interest payment periods and
to perform other procedures specified in the resolution.
(b) The person designated by the board may adjust the
interest on bonds as necessary to permit the bonds to be sold or
resold at par in conjunction with secondary market transactions.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.105. SECURITY QUALIFICATIONS. The board may take
any action necessary to qualify the authority bonds for offer and
sale under the securities laws and regulations of the United
States, this state, and other states of the United States.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.106. INVESTMENT SECURITIES. The bonds and any
interest coupons are investment securities under Chapter 8,
Business & Commerce Code, and may be issued registrable as to
principal or as to both principal and interest or may be made
redeemable before maturity at the option of the authority or may
contain a mandatory redemption provision.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.107. FORM OF BONDS. (a) The authority's bonds may
be issued in the form, denominations, and manner and under the
terms, conditions, and details as provided by the board in the
resolution or order authorizing their issuance.
(b) The bonds shall be signed and executed as provided by
the board's resolution or order authorizing the issuance of the
bonds.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.108. FUNDS. (a) In the resolution or order
authorizing issuance of bonds, the board may make additional
covenants with respect to the bonds and the pledged revenues and may
provide for the flow of funds and the establishment, maintenance,
and investment of funds.
(b) The funds established may include an interest and
sinking fund, a reserve fund, and other funds that will be kept and
maintained by or under the direction of the board.
(c) Any funds established by the board are not to be part of
the state treasury but, at the direction of the board, may be kept
and held in escrow and in trust by the state treasury on behalf of
the authority and the owners of the bonds and used only as provided
by this chapter.
(d) Money in the funds shall be invested in authorized
investments as provided by any bond resolutions and orders of the
authority.
(e) Legal title to money in any fund is in the authority
unless or until paid from the fund as provided by this chapter or
the resolutions or orders authorizing the authority's bonds.
(f) The comptroller, as custodian of any of the funds, shall
administer the funds solely and strictly as provided by this
chapter and the resolutions or orders authorizing the bonds, and
the state may not take any other action relating to any of those
funds except those specified in this chapter and the resolutions
and orders authorizing the bonds.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
Amended by Acts 1997, 75th Leg., ch. 1423, § 20.08, eff. Sept. 1,
1997.
§ 20.109. RESOLUTIONS, ORDERS, ETC. (a) The
resolutions or orders authorizing the bonds may prohibit the
further issuance of bonds or other obligations payable from the
pledged revenue or may reserve the right to issue additional bonds
to be secured by a pledge of and payable from the revenue on a parity
with or subordinate to the lien and pledge in support of the bonds
being issued.
(b) The orders or resolutions of the board issuing bonds may
include other provisions and covenants that the board determines
necessary.
(c) In a resolution or order authorizing the issuance of the
authority's bonds, the board may prescribe systems, methods,
routines, and procedures under which the authority will function.
(d) The board may adopt and have executed any other
proceedings or instruments necessary and convenient in the issuance
of bonds.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.110. APPROVAL OF ATTORNEY GENERAL. The bonds
issued under this chapter are subject to review and approval by the
attorney general in the same manner and with the same effect as
provided by Chapter 1371, Government Code.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
Amended by Acts 2001, 77th Leg., ch. 1420, § 8.418, eff. Sept. 1,
2001.
§ 20.111. BOND REVIEW BOARD. (a) Bonds may not be
issued under this section unless the issuance has been reviewed and
approved by the bond review board. The bond review board is
composed of:
(1) the governor;
(2) the lieutenant governor;
(3) the speaker of the house of representatives; and
(4) the comptroller of public accounts.
(b) The governor is chairman of the review board. The bond
review board may adopt rules governing application for review, the
review process, and reporting requirements. A member of the bond
review board may not be held liable for damages resulting from the
performance of the members' functions under this section.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
Amended by Acts 1997, 75th Leg., ch. 1423, § 20.09, eff. Sept. 1,
1997.
§ 20.112. REFUNDING BONDS. (a) The board may issue
refunding bonds to refund all or part of its outstanding bonds
issued under this chapter, including matured but unpaid interest.
(b) The board may refund bonds in the manner provided by
general law for revenue bonds.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.113. ELIGIBLE SECURITY. The bonds are eligible to
secure deposits of public funds of the state and cities, counties,
school districts, and other political subdivisions of the state.
The bonds are lawful and sufficient security for deposits to the
extent of their face value.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.114. LEGAL INVESTMENTS. The bonds are legal and
authorized investments for:
(1) banks;
(2) savings banks;
(3) trust companies;
(4) savings and loan associations;
(5) insurance companies;
(6) fiduciaries;
(7) trustees;
(8) guardians; and
(9) sinking funds of cities, counties, school
districts, and other political subdivisions of the state and other
public funds of the state and its agencies, including the permanent
school fund.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.115. TAX EXEMPT. Since the authority is performing
an essential governmental function in the exercise of the powers
conferred on it by this chapter, the bonds issued under this Act,
and the interest and income from the bonds, including any profit
made on the sale of bonds, and all fees, charges, gifts, grants,
revenues, receipts, and other money received or pledged to pay or
secure the payment of bonds are free from taxation and assessments
of every kind by this state and any city, county, district,
authority, or other political subdivision of this state.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.116. PLEDGE OF STATE FAITH AND CREDIT; COVENANT
WITH OWNERS OF BONDS. (a) The authority's bonds are obligations
solely of the authority and are payable solely from funds of the
authority, and this chapter and the authority's bonds are not and do
not create or constitute a pledge, giving, or lending of the faith
or credit or taxing authority of the state.
(b) Each bond of the authority must include a statement that
the state is not obligated to pay the premium, principal of, or
interest on the authority's bonds and that the faith or credit and
the taxing authority of the state is not pledged, given, or loaned
to those payments.
(c) The state pledges to and agrees with the owners of any
bonds issued in accordance with this chapter that the state will not
limit or alter the rights vested in the authority to fulfill the
terms of any agreements made with the owners of the bonds or in any
way impair the rights and remedies of those owners until the bonds,
together with any premium and interest, interest on any unpaid
premium or installments of interest, and all costs and expenses in
connection with any action or proceeding by or on behalf of those
owners, are fully met and discharged. The authority may include
this pledge and agreement of the state in any agreement with the
owners of bonds.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
§ 20.117. ENFORCEMENT BY MANDAMUS. A writ of mandamus
and all other legal and equitable remedies are available to any
party at interest to require the authority and any other party to
carry out agreements and to perform functions and duties under this
chapter, the Texas Constitution, or the authority's bond
resolutions and orders.
Added by Acts 1987, 70th Leg., ch. 728, § 1, eff. June 20, 1987.
