WATER CODE
CHAPTER 65. SPECIAL UTILITY DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
§ 65.001. DEFINITIONS. In this chapter:
(1) "District" means a special utility district
operating under this chapter.
(2) "Board" means the board of directors of a
district.
(3) "Director" means a member of the board of
directors of a district.
(4) "Commission" means the Texas Natural Resource
Conservation Commission.
(5) "Executive director" means the executive director
of the Texas Natural Resource Conservation Commission.
(6) "Public agency" means any city, the United States
and its agencies, the State of Texas and its agencies, and any
district or authority created under Article XVI, Section 59, or
Article III, Sections 52(b)(1) and (2), of the Texas Constitution.
(7) "City" means any incorporated city or town.
(8) "Extraterritorial jurisdiction" means the
extraterritorial jurisdiction of a city as determined under Chapter
42, Local Government Code.
(9) "Sole expense" means the actual cost of
relocating, raising, lowering, rerouting, changing grade, or
altering the construction to provide comparable replacement
without enhancing the facility, after deducting the net salvage
value derived from the old facility.
(10) "Water supply or sewer service corporation" means
any member-owned, member-controlled, nonprofit water supply or
sewer service corporation created and operating under Chapter 67,
that:
(A) provides water supply services to
noncontiguous subdivisions in two or more counties, at least one of
which counties has a population greater than 3.3 million; or
(B) is providing the services of a water supply
or sewer service corporation under a certificate of convenience and
necessity issued by the commission or a predecessor agency.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 1985, 69th Leg., ch. 795, § 1.153, eff.
Sept. 1, 1985; Acts 1987, 70th Leg., ch. 149, § 47, eff. Sept. 1,
1987; Acts 1991, 72nd Leg., 1st C.S., ch. 3, § 1.082, eff. Aug.
12, 1991; Acts 1997, 75th Leg., ch. 474, § 1, eff. Sept. 1, 1997;
Acts 1999, 76th Leg., ch. 62, § 18.67, eff. Sept. 1, 1999; Acts
1999, 76th Leg., ch. 320, § 1, eff. Aug. 30, 1999; Acts 2001,
77th Leg., ch. 669, § 150, eff. Sept. 1, 2001.
SUBCHAPTER B. CREATION OF DISTRICT; CONVERSION OF DISTRICT
§ 65.011. CREATION OF DISTRICT. A special utility
district may be created under and subject to the authority,
conditions, and restrictions of, and is considered a conservation
and reclamation district under Article XVI, Section 59, of the
Texas Constitution.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.012. PURPOSES OF DISTRICT. A district may be
created:
(1) to purchase, own, hold, lease, and otherwise
acquire sources of water supply; to build, operate, and maintain
facilities for the transportation of water; and to sell water to
towns, cities, and other political subdivisions of this state, to
private business entities, and to individuals;
(2) for the establishment, operation, and maintenance
of fire-fighting facilities to perform all fire-fighting
activities within the district; or
(3) for the protection, preservation, and restoration
of the purity and sanitary condition of water within the district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 2003, 78th Leg., ch. 494, § 1, eff. June 20,
2003.
§ 65.013. COMPOSITION OF DISTRICT. (a) A district may
include the area in all or part of any one or more counties
including all or part of any cities and other public agencies.
(b) The land composing a district is not required to be
contiguous, but may consist of separate bodies of land separated by
land that is not included in the district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.014. CERTIFIED RESOLUTION SEEKING CREATION OF
DISTRICT. (a) If creation of a district is proposed by a water
supply or sewer service corporation, a certified copy of a
resolution requesting creation must be filed with the commission.
(b) The resolution shall be signed by the president and
secretary of the board of directors of a water supply or sewer
service corporation and shall state that the water supply or sewer
service corporation, acting through its board of directors, has
found that it is necessary and desirable for the water supply or
sewer service corporation to be converted into a district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 1999, 76th Leg., ch. 320, § 2, eff. Aug. 30,
1999.
§ 65.015. CONTENTS OF RESOLUTION. In addition to the
requirements stated in Section 65.014, the resolution shall:
(1) describe the boundaries of the proposed district
by metes and bounds or by lot and block number, if there is a
recorded map or plat and survey of the area, or by any other
commonly recognized means in a certificate attached to the
resolution executed by a registered professional engineer;
(2) state the general nature of the services presently
performed by the water supply or sewer service corporation, the
general nature of the services proposed to be provided by the
district, and the necessity for the services provided by the
district;
(3) include a name of the district that is generally
descriptive of the location of the district followed by the words
special utility district, but may not be the same name as any other
district in the same county;
(4) include the names of not less than five and not
more than 11 qualified persons to serve as the initial board of
directors of the district; and
(5) specify each purpose for which the district is
being established.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 1999, 76th Leg., ch. 320, § 2, eff. Aug. 30,
1999; Acts 2003, 78th Leg., ch. 494, § 2, eff. June 20, 2003.
§ 65.016. CONSENT OF CITY. A district may operate
within the corporate limits of a city or within the
extraterritorial jurisdiction of a city, provided that a city may
require that the district construct all facilities to serve the
land in accordance with plans and specifications that are approved
by the city. The city may also require that the city be entitled to
inspect facilities being constructed by a district within the
corporate limits or extraterritorial jurisdiction of the city.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.018. NOTICE AND HEARING ON DISTRICT CREATION. If a
resolution is filed under Section 65.014, the commission shall give
notice of an application as required by Section 49.011 and may
conduct a hearing on the application if the commission determines
that a hearing is necessary under Section 49.011.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 1997, 75th Leg., ch. 1070, § 40, eff. Sept.
1, 1997.
§ 65.020. HEARING. (a) If the commission determines
that a hearing is necessary under Section 49.011, the commission
shall conduct a hearing and accept evidence on the sufficiency of
the resolution and whether or not the request for conversion is
feasible and practicable and is necessary and would be a benefit to
all or any part of the land proposed to be included in the district.
(b) The commission has jurisdiction to determine all issues
on the sufficiency of the resolution and the creation of the
district.
(c) The hearing may be adjourned from day to day, and the
commission may make all incidental orders necessary with respect to
the matters before it.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 1997, 75th Leg., ch. 1070, § 41, eff. Sept.
1, 1997.
§ 65.021. GRANTING OR REFUSING CREATION OF
DISTRICT. (a) If the commission finds that the resolution
conforms to the requirements of Section 65.015 and that the request
for conversion is feasible and practicable and is necessary and
would be a benefit to the land proposed to be included in the
district, the commission shall make these findings in an order and
shall authorize the creation of the district on approval at the
confirmation and directors' election called and held under this
subchapter.
(b) In determining if the request for conversion is feasible
and practicable and if it is necessary and would be a benefit to the
land included in the district, the commission shall consider:
(1) the availability of comparable service from other
systems, including water districts, municipalities, and regional
authorities;
(2) the reasonableness of projected construction
costs, if any, tax rates, and water and sewer rates; and
(3) whether or not the district and its system and
subsequent development within the district will have an
unreasonable effect on the following:
(A) land elevation;
(B) subsidence;
(C) groundwater level within the region;
(D) recharge capability of a groundwater source;
(E) natural runoff rates and drainage; and
(F) water quality.
(c) If the commission finds that not all of the land
proposed to be included in the district will be benefited by the
creation of the district, the commission shall formally make this
finding and shall exclude all land that is not benefited from the
proposed district and shall redefine the proposed district's
boundaries accordingly.
(d) If the commission finds that the resolution does not
conform to the requirements of Section 65.015 of this code or that
the request for conversion is not feasible, practicable, necessary,
or a benefit to the land in the district, the commission shall make
this finding in its order and shall deny the creation of the
district.
(e) A copy of the order of the commission granting or
denying the request for conversion stated in the resolution must be
mailed to each city that has extraterritorial jurisdiction in a
county in which the proposed district is located and that requested
notice of hearing as provided by Section 65.019 of this code.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 1997, 75th Leg., ch. 1070, § 42, eff. Sept.
1, 1997.
§ 65.022. TEMPORARY DIRECTORS. If the commission
authorizes the creation of the district, it shall appoint those
persons whose names are listed in the resolution filed with the
commission by the water supply or sewer service corporation to
serve as temporary directors until initial directors are elected as
provided by this subchapter.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 1999, 76th Leg., ch. 320, § 2, eff. Aug. 30,
1999.
§ 65.023. APPEAL FROM ORDER OF COMMISSION. A city or a
person who appeared in person or by attorney and offered testimony
for or against the creation of the district, may appeal from the
order of the commission authorizing or refusing the creation of the
district. The appeal must be made within 30 days after the entry of
the order.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
SUBCHAPTER C. ADMINISTRATIVE PROVISIONS
§ 65.101. BOARD OF DIRECTORS. A district is governed by
a board of not less than five and not more than 11 directors.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.102. QUALIFICATIONS FOR DIRECTORS. To be
qualified to serve as a director, a person must be:
(1) at least 18 years old;
(2) a resident citizen of this state; and
(3) either own land subject to taxation in the
district, be a user of the facilities of the district, or be a
qualified voter of the district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.103. ELECTION OF DIRECTORS; TERMS OF
OFFICE. (a) The persons receiving the highest number of votes at
each election shall serve as directors of the district.
(b) The terms of the directors may run concurrently, or may
be staggered, but in any event, the term of office of a director may
not exceed three years.
(c) The method for determining the initial terms for each of
the directors constituting the initial board shall be determined by
the temporary directors, and the terms must be clearly stated on the
ballot for the confirmation and directors' election.
(d) Notwithstanding Sections 41.001 and 41.003, Election
Code, the board may hold an election to elect directors on any date
determined by the board. The terms of directors must be stated on
the ballot.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985; Acts 1995, 74th Leg., ch. 715, § 35, eff. Sept. 1,
1995; Acts 1997, 75th Leg., ch. 1070, § 43, eff. Sept. 1, 1997.
SUBCHAPTER D. GENERAL POWERS AND DUTIES
§ 65.201. POWERS. (a) A district has the functions,
powers, authority, and rights that will permit accomplishment of
the purposes for which it is created.
(b) A district may purchase, construct, acquire, own,
operate, maintain, repair, improve, or extend inside and outside
its boundaries any works, improvements, facilities, plants,
equipment, and appliances necessary to accomplish the purposes for
which it was created, including works, improvements, facilities,
plants, equipment, and appliances incident, helpful, or necessary
to:
(1) supply water for municipal uses, domestic uses,
power and commercial purposes, and other beneficial uses or
controls;
(2) collect, transport, process, dispose of, store,
and control domestic, industrial, or communal wastes whether in
fluid, solid, or composite state;
(3) gather, conduct, divert, and control local storm
water or other local harmful excesses of water in the district;
(4) irrigate the land in a district;
(5) alter land elevation in a district where it is
needed; and
(6) provide fire-fighting services for the
inhabitants of the district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.203. SOLID WASTE. A district may collect solid
waste and may purchase, construct, acquire, own, operate, maintain,
repair, improve, and extend a solid waste collection and disposal
system inside and outside the district and may make proper charges
for its facilities or services provided by the system.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.205. ADOPTING RULES. A district may adopt and
enforce reasonable rules to:
(1) secure and maintain safe, sanitary, and adequate
plumbing installations, connections, and appurtenances as
subsidiary parts of its sanitary sewer system;
(2) preserve the purity and the sanitary condition of
all water controlled by the district;
(3) prevent waste or the unauthorized use of water
controlled by the district;
(4) regulate privileges on any land or easement owned
or controlled by the district;
(5) provide and regulate a safe and adequate
freshwater distribution system; and
(6) ensure adequate safeguards in the performance of
the district's fire-fighting activities.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.206. EFFECT OF RULES. After the required
publication, rules adopted by the district under Section 65.205 of
this code shall be recognized by the courts as if they were penal
ordinances of a city.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.207. PUBLICATION OF RULES. (a) The board shall
publish a substantive statement of each rule and the penalty for its
violation once a week for two consecutive weeks in one or more
newspapers with general circulation in the area in which the
district is located.
(b) The substantive statement shall be condensed as far as
possible to intelligently explain the purpose to be accomplished or
the act forbidden by each rule.
(c) The notice must advise that breach of a rule will
subject the violator to a penalty and that the full text of each
rule is on file in the principal office of the district at which it
may be read by any interested person.
(d) Any number of rules may be included in one notice.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.208. EFFECTIVE DATE OF RULES. The penalty for
violation of a rule is not effective and enforceable until five days
after the last publication of the notice. Five days after the last
publication, the published rule takes effect and ignorance of the
rule is not a defense to a prosecution for the enforcement of the
penalty.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.235. PROHIBITION ON ASSESSMENT OR COLLECTION OF
TAXES. Section 49.107 does not apply to a district created under
this chapter.
Added by Acts 1995, 74th Leg., ch. 715, § 36, eff. Sept. 1, 1995.
SUBCHAPTER G. ISSUANCE OF BONDS AND NOTES
§ 65.501. ISSUANCE OF BONDS AND NOTES. The district may
issue its bonds or notes for the purpose of purchasing,
constructing, acquiring, owning, operating, repairing, improving,
or extending any district works, improvements, facilities, plants,
equipment, and appliances needed to accomplish the purposes listed
in Section 65.012 of this code, including works, improvements,
facilities, plants, equipment, and appliances needed to provide a
waterworks system, sanitary sewer system, storm sewer system, solid
waste disposal system, or to provide for solid waste collection or
fire-fighting services and facilities.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.502. FORM OF BONDS AND NOTES. (a) A district may
issue its bonds or notes in various series or issues.
(b) Bonds or notes shall mature serially or otherwise not
more than 40 years from their date and shall bear interest at any
rate permitted by the constitution and laws of this state. The
board shall determine the maturity and the interest rate of the
bonds and notes.
(c) A district's bonds, notes, and interest coupons, if any,
are investment securities under Chapter 8, Business & Commerce
Code, and may be issued registrable as to principal or as to both
principal and interest. The board may make the bonds redeemable
before maturity, at the option of the district, or may include in
the bonds a mandatory redemption provision.
(d) A district's bonds or notes may be issued in the form,
denominations, and manner and under the terms, conditions, and
details, and must be signed and executed, as provided by the board
in the resolution or order authorizing the issuance of the bonds or
notes.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.503. MANNER OF REPAYMENT OF BONDS OR NOTES. The
board may provide for the payment of principal of and interest and
redemption price, if any, on the bonds or notes by pledging all or
any part of the designated revenues to result from the ownership or
operation of the district's works, improvements, facilities,
plants, equipment, and appliances or under specific contracts for
the period of time the board determines.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.504. ADDITIONAL SECURITY FOR BONDS OR
NOTES. (a) The bonds or notes, within the discretion of the
board, may be additionally secured by a deed of trust or mortgage
lien on all or part of the physical properties of the district, and
franchises, easements, water rights, and appropriation permits,
leases, and contracts and all rights appurtenant to those
properties, vesting in the trustee power to sell the property for
payment of the indebtedness, power to operate the property, and all
other authority necessary for the further security of the bonds or
notes.
(b) The trust indenture, regardless of the existence of the
deed of trust or mortgage lien on any property, may:
(1) include provisions prescribed by the board for the
security of the bonds or notes and the preservation of the trust
estate;
(2) make provision for amendment or modification;
(3) condition the right to spend district money or
sell district property on approval of a registered professional
engineer selected as provided in the trust indenture; and
(4) make provision for investment of funds of the
district.
(c) Any purchaser under a sale under the deed of trust or
mortgage lien, if one is given, is absolute owner of the property,
facilities, and rights purchased and is entitled to maintain and
operate them.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.505. METHOD FOR ISSUANCE OF BONDS AND NOTES. Bonds
or notes may be issued by resolution or order of the board.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.506. PROVISIONS OF BONDS OR NOTES. (a) In an
order or resolution authorizing the issuance of bonds or notes,
including refunding bonds, the board may provide for the flow of
funds, the establishment and maintenance of the interest and
sinking fund, the reserve fund, and other funds, and may enter into
additional covenants relating to the bonds or notes and the pledged
revenues and to the operation and maintenance of those works,
improvements, facilities, plants, equipment, and appliances the
revenues of which are pledged, including provision for the
operation or for the leasing of all or any part of the improvements
and the use or pledge of money derived from the operation contracts
and leases, as the board considers appropriate.
(b) An order or resolution of the board authorizing the
issuance of bonds or notes also may prohibit the further issuance of
bonds, notes, 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, subject to the conditions that may be set forth in the order
or resolution.
(c) An order or resolution of the board issuing bonds or
notes may include other provisions and covenants determined by the
board that are not prohibited by the constitution or by this
chapter.
(d) The board may adopt and have executed any other
proceedings or instruments necessary and convenient in the issuance
of bonds or notes.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.507. USE OF BOND OR NOTE PROCEEDS. The district
may use bond or note proceeds to pay interest, administrative, and
operating expenses expected to accrue during the period of
construction. The period of construction under this section may
not exceed three years as provided by the bond order or resolution.
The district also may use bond or note proceeds to pay expenses
incurred and to be incurred in the issuance, sale, and delivery of
the bonds or notes.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.508. SALE OR EXCHANGE OF BONDS. (a) The board
shall sell the bonds on the best terms and for the best possible
price, but the bonds may not be sold for less than 95 percent of
their face value.
(b) The district may exchange bonds for property acquired by
purchase or in payment of the contract price of work done or
services performed for the use and benefit of the district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.510. REFUNDING BONDS. (a) A district may issue
bonds to refund all or any part of its outstanding bonds, notes, or
other obligations, including matured but unpaid interest coupons.
(b) Refunding bonds shall mature serially or otherwise not
more than 40 years from their date and shall bear interest at any
rate or rates permitted by the constitution and laws of this state.
(c) Refunding bonds may be payable from the same source as
the bonds, notes, or other obligations being refunded or from other
additional sources.
(d) The refunding bonds shall be approved by the attorney
general and shall be registered by the comptroller on the surrender
and cancellation of the bonds being refunded as provided by Section
65.509 of this code.
(e) An order or resolution authorizing the issuance of
refunding bonds may provide that the refunding bonds will be sold
and the proceeds deposited in the place or places at which the bonds
being refunded are payable, and the refunding bonds may be issued
before the cancellation of the bonds being refunded provided an
amount sufficient to pay the principal of and interest on the bonds
being refunded to their maturity dates, or to their option dates if
the bonds have been duly called for payment prior to maturity
according to their terms, is deposited in the place or places at
which the bonds being refunded are payable. The comptroller shall
register the refunding bonds without the surrender and cancellation
of bonds being refunded.
(f) A refunding may be accomplished in one or in several
installment deliveries. Refunding bonds and their interest coupons
are investment securities under Chapter 8, Business & Commerce
Code.
(g) In lieu of the method set forth in this section, a
district may refund bonds, notes, or other obligations as provided
by the general laws of this state.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.511. OBLIGATIONS; LEGAL INVESTMENT; SECURITY FOR
FUNDS. (a) Bonds, notes, and other obligations issued by a
district are legal and authorized investments for all banks,
savings banks, trust companies, savings and loan associations,
insurance companies, fiduciaries, and trustees, guardians, and for
interest and sinking funds and other public funds of the state and
its agencies, including the permanent school fund, and counties,
cities, school districts, and other political subdivisions of the
state.
(b) A district's bonds, notes, and other obligations are
eligible to secure deposits of public funds of the state and its
agencies and counties, cities, school districts, and other
political subdivisions of the state. The bonds, notes, and other
obligations are lawful and sufficient security to the extent of
their market value if accompanied by all unmatured interest coupons
attached to them.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.513. MANDAMUS BY BONDHOLDERS. In addition to other
rights and remedies provided by the law of this state, if a district
defaults in the payment of principal of, interest on, or redemption
price on its bonds when due, or if the district fails to make
payments into any fund created in the order or resolution
authorizing the issuance of the bonds, or defaults in the
observation or performance of any other covenants, conditions, or
obligations stated in the resolution or order authorizing the
issuance of its bonds, the owners of any of the bonds are entitled
to a writ of mandamus issued by a court of competent jurisdiction
compelling the district and its officials to observe and perform
the covenants, the obligations, or conditions prescribed in the
order or resolution authorizing the issuance of the district's
bonds.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.515. CANCELLATION OF UNSOLD BONDS. (a) The
board, by order or resolution, may provide for the cancellation of
all or any part of any bonds that have been submitted to and
approved by the attorney general and registered by the comptroller,
but not yet sold, and may provide for the issuance of new bonds in
lieu of the old bonds in the manner provided by this chapter for the
issuance of the original bonds including their approval by the
attorney general and their registration by the comptroller.
(b) The order or resolution of the board shall describe the
bonds to be canceled, and also shall describe the new bonds to be
issued in lieu of the old bonds.
(c) A certified copy of the order or resolution of the board
providing for the cancellation of the old bonds, together with the
old bonds, shall be delivered to the comptroller, who shall cancel
and destroy the old bonds and make a record of the cancellation.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
SUBCHAPTER H. ADDING AND EXCLUDING TERRITORY; CONSOLIDATING AND
DISSOLVING DISTRICTS
§ 65.723. CONSOLIDATION OF DISTRICTS. Two or more
districts governed by this chapter may consolidate into one
district as provided by this subchapter.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.724. ELECTIONS TO APPROVE
CONSOLIDATION. (a) After the board of each district has agreed on
the terms and conditions of consolidation, which may include the
assumption by each district of the other district's bonds, notes,
or other obligations and adoption of a name for the consolidated
district, the board of each district shall order an election in each
of their respective districts to determine whether the districts
should be consolidated.
(b) The board of each district shall order the election to
be held on the same day in each district and shall give notice of the
election for the time and in the manner provided by law for bond
elections under this chapter.
(c) The districts may be consolidated only if the qualified
voters in each district voting at the election vote in favor of the
consolidation.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.725. GOVERNING CONSOLIDATED DISTRICTS. (a) After
two or more districts are consolidated, they become one district
and are governed as one district.
(b) During a period of 90 days after the date of the election
to approve consolidation, the officers of each district shall
continue to act jointly as officers of the original districts to
settle the affairs of their respective districts.
(c) The consolidation agreement may provide that the
officers of the original districts shall continue to act jointly as
officers of the consolidated district or name persons to serve as
officers of the consolidated district until their successors assume
office under Subsection (e) of this section.
(d) On the next available uniform election date, an election
shall be called and held, and directors will be elected for the
consolidated district in the same manner and for the same term as
directors elected under Section 65.103 of this code.
(e) New officers of the consolidated district must qualify
as officers of the district within the period of 90 days after the
election and shall assume their offices at the expiration of the
90-day period.
(f) The current board shall approve the bond of each new
officer.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.726. DEBTS OF ORIGINAL DISTRICTS. After two or
more districts are consolidated, the debts of the original
districts shall be protected and may not be impaired.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.727. DISSOLUTION OF DISTRICT PRIOR TO ISSUANCE OF
BONDS. (a) If the board considers it advisable before the
issuance of any bonds, notes, or other indebtedness, the board may
dissolve a district and liquidate the affairs of the district as
provided by this subchapter.
(b) If a majority of the board finds at any time before the
issuance of bonds, notes, or other obligations or the final lending
of its credit in another form that the proposed undertaking for any
reason is impracticable or apparently cannot be successfully and
beneficially accomplished, the board may issue notice of a hearing
on a proposal to dissolve the district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.728. NOTICE OF HEARING. The board shall post
notice of the hearing on the bulletin board at the courthouse door
of each county in which the district is located and at three or more
other public places within the boundaries of the district and shall
publish notice of the hearing two times in a newspaper with general
circulation in the district. The notice must be posted and
published at least one time no later than the 14th day before the
date set for the hearing on the proposed dissolution of the
district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.729. HEARING. The board shall hear all interested
persons and shall consider their evidence at the time and place
stated in the notice.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.730. BOARD'S ORDER TO DISSOLVE DISTRICT. If the
board unanimously determines from the evidence that the best
interests of the persons and property in the district will be served
by dissolving the district, the board shall enter the appropriate
findings and order in its records dissolving the district.
Otherwise the board shall enter its order providing that the
district has not been dissolved.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
§ 65.731. JUDICIAL REVIEW OF BOARD'S ORDER. The board's
decree to dissolve the district may be appealed in the manner
provided by Sections 65.708-65.710 of this code for the review of an
order excluding land from the district.
Added by Acts 1983, 68th Leg., p. 2448, ch. 435, § 4, eff. Aug.
29, 1983. Amended by Acts 1985, 69th Leg., ch. 447, § 1, eff.
Nov. 15, 1985.
