Sec. 552.021. CONTRACT BETWEEN DISTRICT AND MUNICIPALITY WITH POPULATION OF MORE THAN 900,000. (a) In this section, "district" means a conservation and reclamation district created under Article XVI, Section 59, of the Texas Constitution.

(b) A municipality with a population of more than 900,000 that owns and operates a municipal water system may:

(1) enter into a contract or joint enterprise with a district for the conveyance, transportation, and distribution of water for or on behalf of the municipality; or

(2) contract to sell water to a district and repurchase all or part of the water at one or more designated points on the district's conveyance, transportation, and distribution system.

(c) A contract under Subsection (b) may provide that municipal payments to the district under the contract:

(1) are an operating expense of the municipal water system; or

(2) are payable from surplus or other funds of the municipal water system, from the revenues of specified municipal water sales contracts, or from other sources.

(d) If the contract under Subsection (b) obligates the municipality to pay any of the consideration from tax revenue, it must first be approved at an election ordered and conducted in the same manner as a bond election.

(e) A contract under Subsection (b) may be made for any period not to exceed 40 years and may provide that it continues in effect until payment of:

(1) all bonds issued by the district to finance conveyance, transportation, or distribution facilities, or the extension, enlargement, or improvement of those facilities; and

(2) any bonds issued to refund bonds described by Subdivision (1).

(f) A municipality covered by this section may contract for the sale of water to industrial and commercial customers or municipal corporations or political subdivisions as provided by ordinance. A contract under this subsection may not be for a term longer than 40 years.

(g) A municipality electing to make a contract under this section is governed solely by this section regardless of another statute, charter provision, or ordinance to the contrary.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Renumbered from Local Government Code, Section 402.021 by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 3.76(a)(2), eff. April 1, 2009.