A district may make certain water-related contracts, but the contract needs majority approval from the governing bodies involved, and an election must be called if a tax approval vote is required by the Constitution.
Sec. 54.2351. CONTRACTS WITH OTHER DISTRICTS, WATER SUPPLY CORPORATIONS, OR OTHER RETAIL PUBLIC UTILITIES. (a) In this section, "authorized water district" means a district created under Section 52(b)(1) or (2), Article III, or Section 59, Article XVI, Texas Constitution. (b) A district may enter into a contract with an authorized water district or a water supply corporation that authorizes the district to acquire, through the issuance of debt or other means, and convey to the authorized water district or water supply corporation all or part of a water supply, treatment, or distribution system, a sanitary sewage collection or treatment system, or works or improvements necessary for drainage of land in the district. The contract may: (1) permit the district to rehabilitate, repair, maintain, improve, enlarge, or extend any existing facilities to be conveyed to the authorized water district or water supply corporation; or (2) require the district to pay impact fees or other fees to the authorized water district or water supply corporation for capacity or service in facilities of the authorized water district or water supply corporation. (c) The contract entered into under Subsection (b) may authorize the authorized water district or water supply corporation to purchase the water, sewer, or drainage system from the district through periodic payments to the district in amounts that, combined with the net income of the district, are sufficient for the district to pay the principal of and interest on any bonds of the district. The contract may provide that the payments due under this subsection: (1) are payable from and secured by a pledge of all or part of the revenues of the water, sewer, or drainage system; (2) are payable from taxes to be imposed by the authorized water district; or (3) are payable from a combination of the revenues and taxes described by Subdivisions (1) and (2). (d) The contract may authorize the authorized water district or water supply corporation to operate the water, sewer, or drainage system conveyed by the district under Subsection (b). (e) The contract may require the district to make available to the authorized water district or water supply corporation all or part of the raw or treated water to be used for the provision of services within the district. (f) If the contract provides for the water, sewer, or drainage system to be conveyed to the authorized water district or water supply corporation on or after the completion of construction, the authorized water district or water supply corporation may pay the district to provide water, sewer, or drainage services to residents of the authorized water district or customers of the water supply corporation. (g) The contract may authorize the district to convey to the authorized water district or water supply corporation at no cost a water, sewer, or drainage system and require the authorized water district or water supply corporation to use all or part of those systems to provide retail service to customers within the district in accordance with the laws of this state and any certificate of convenience and necessity of the authorized water district or water supply corporation. (h) A contract under this section must be approved by a majority vote of the governing bodies of the district and the authorized water district or water supply corporation. If Section 52, Article III, or Section 59, Article XVI, Texas Constitution, requires that qualified voters of the district approve the imposition of a tax by the district or the authorized water district, the district or the authorized water district shall call an election for that purpose. (i) In this subsection, "retail public utility" has the meaning assigned by Section 13.002. A district may enter into a contract with a retail public utility for water or sewer service under which the retail public utility may use the district's water or sewer system to serve customers located in the district. Added by Acts 2005, 79th Leg., Ch. 962 (H.B. 1644), Sec. 4, eff. June 18, 2005. Amended by: Acts 2019, 86th Leg., R.S., Ch. 1128 (H.B. 2590), Sec. 9, eff. September 1, 2019. Acts 2019, 86th Leg., R.S., Ch. 1128 (H.B. 2590), Sec. 10, eff. September 1, 2019.