By:  Gallego                                          H.B. No. 2816
       73R2849 JD-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the creation, administration, powers, duties,
    1-3  operations, financing, and organization of the Middle Rio Grande
    1-4  Solid Waste Management District; granting the authority to issue
    1-5  revenue bonds.
    1-6        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-7                    ARTICLE 1.  GENERAL PROVISIONS
    1-8        SECTION 1.01.  Purpose.  The purpose of this Act is to
    1-9  establish the Middle Rio Grande Solid Waste Management District as
   1-10  the exclusive provider of solid waste management services within
   1-11  the district.  This Act does not affect a solid waste disposal or
   1-12  management facility in the district on the effective date of this
   1-13  Act.
   1-14        SECTION 1.02.  Findings and Declaration of Policy.  (a)  The
   1-15  legislature finds that:
   1-16              (1)  the quality of water in the Middle Rio Grande area
   1-17  is materially affected by the disposal of waste throughout the
   1-18  area;
   1-19              (2)  a regional effort to prevent water pollution, plan
   1-20  corrective and preventive measures, provide facilities for waste
   1-21  disposal, and regulate waste disposal is far more effective than
   1-22  efforts on a smaller scale;
   1-23              (3)  solid waste, as well as other waste, may impair
   1-24  water quality, including by seepage or drainage;
    2-1              (4)  creation of the Middle Rio Grande Solid Waste
    2-2  Management District would advance the established policy of the
    2-3  state to maintain the quality of the water in the state consistent
    2-4  with:
    2-5                    (A)  the public health and public enjoyment;
    2-6                    (B)  the propagation and protection of
    2-7  terrestrial and aquatic life;
    2-8                    (C)  the operation of existing industries; and
    2-9                    (D)  the economic development of the state; and
   2-10              (5)  the impending shortage of water for beneficial use
   2-11  in the district requires that all reasonable measures be taken to
   2-12  prevent and abate water pollution and to ensure the availability of
   2-13  water for beneficial use.
   2-14        (b)  The legislature finds that this Act is in compliance
   2-15  with Article XVI, Sections 59(d) and (e), of the Texas Constitution
   2-16  and that the legislature has the power and authority to enact this
   2-17  Act.
   2-18        (c)  The legislature finds that all of the area included in
   2-19  the district is benefited by the exercise of the power conferred by
   2-20  this Act.
   2-21        SECTION 1.03.  Definitions.  In this Act:
   2-22              (1)  "Board" means the board of directors of the
   2-23  district.
   2-24              (2)  "Director" means a member of the board.
   2-25              (3)  "District" means the Middle Rio Grande Solid Waste
   2-26  Management District created under this Act.
   2-27              (4)  "Outside the district" means the area contained in
    3-1  municipalities and counties adjacent to the district.
    3-2              (5)  "Person" means an individual, public or private
    3-3  corporation, political subdivision, governmental agency,
    3-4  municipality, copartnership, association, firm, trust, estate, or
    3-5  any other legal entity.
    3-6              (6)  "Solid waste" has the meaning assigned by Section
    3-7  361.003, Health and Safety Code.
    3-8              (7)  "Water" means groundwater, percolating or
    3-9  otherwise, lakes, bays, ponds, springs, rivers, streams, creeks,
   3-10  and all other bodies of surface water, natural or artificial, that
   3-11  are wholly or partially within the district.
   3-12              (8)  "Water pollution" means the alteration of the
   3-13  physical, chemical, or biological quality of or the contamination
   3-14  of water that renders the water harmful, detrimental, or injurious
   3-15  to humans, animal life, vegetation, or property, or to public
   3-16  health, safety, or welfare, or that impairs the usefulness or the
   3-17  public enjoyment of the water for any lawful or reasonable purpose.
   3-18    ARTICLE 2.  CREATION OF DISTRICT; INITIAL APPOINTMENT OF BOARD
   3-19        SECTION 2.01.  CREATION OF DISTRICT.  Pursuant to Article
   3-20  XVI, Section 59, of the Texas Constitution, a conservation and
   3-21  reclamation district to be known as the Middle Rio Grande Solid
   3-22  Waste Management District is created as a governmental agency and
   3-23  body politic and corporate of the state.
   3-24        SECTION 2.02.  Participation in District.  (a)  The
   3-25  commissioners courts of Dimmit, Edwards, Kinney, La Salle,
   3-26  Maverick, Real, Uvalde, Val Verde, and Zavala counties by
   3-27  resolution may include the unincorporated area of the county in the
    4-1  district.
    4-2        (b)  The governing body of a municipality within a county
    4-3  listed in Subsection (a) of this section by order may include that
    4-4  municipality in the district.
    4-5        (c)  The commissioners court or governing body must issue the
    4-6  resolution or order not later than the 60th day after the date on
    4-7  which this Act takes effect.
    4-8        (d)  Territory annexed by a participating municipality is
    4-9  included in the district on annexation.
   4-10        (e)  A county or municipality that elects not to participate
   4-11  in the district may contract with the district for services.
   4-12                  ARTICLE 3.  DISTRICT ADMINISTRATION
   4-13        SECTION 3.01.  BOARD OF DIRECTORS.  (a)  The district is
   4-14  governed by a board of directors appointed as provided by this
   4-15  section.  The board may appoint an executive committee to exercise
   4-16  the powers of the board under this Act.
   4-17        (b)  Board appointments are subject to the approval of the
   4-18  Middle Rio Grande Development Council.
   4-19        (c)  On or after the date on which the eligible counties and
   4-20  municipalities elect to participate in the district, the
   4-21  commissioners court of each participating county shall each appoint
   4-22  one person, the governing body of each municipality that is the
   4-23  county seat of a participating county shall each appoint one
   4-24  person, and the governing body of each participating municipality
   4-25  with a population of 25,000 or more, according to the most recent
   4-26  federal decennial census, and the commissioners court in which the
   4-27  municipality is located shall jointly appoint one person to serve
    5-1  as initial directors for the district.
    5-2        (d)  The initial directors appointed under Subsection (c) of
    5-3  this section shall draw lots to determine which directors shall
    5-4  serve one-year terms expiring on September 1, 1994, and which
    5-5  directors shall serve two-year terms expiring on September 1, 1995.
    5-6  The directors shall draw lots so that half of the directors serve
    5-7  two-year terms and half serve one-year terms.  If an odd number of
    5-8  directors are appointed, the directors shall draw lots so that the
    5-9  number of directors equal to half of the directors plus one serve
   5-10  two-year terms and the remaining directors serve one-year terms.
   5-11        (e)  Successor directors are appointed in the same manner as
   5-12  in the original appointment and serve two-year terms.
   5-13        (f)  A vacancy on the board is filled for the unexpired term
   5-14  in the same manner as in the original appointment.
   5-15        SECTION 3.02.  QUALIFICATIONS FOR OFFICE.  (a)  To be
   5-16  eligible to be appointed as or to serve as a director, a person
   5-17  must be:
   5-18              (1)  a resident of the district; and
   5-19              (2)  a qualified voter.
   5-20        (b)  Each director must execute a bond in the amount of
   5-21  $5,000 with a corporate surety authorized to do business in this
   5-22  state and conditioned on the faithful performance of the director's
   5-23  duties and file a copy of the bond with the secretary of state and
   5-24  the commissioners court of the county in which the director
   5-25  resides.  The district shall pay for the director's bond with
   5-26  district funds.
   5-27        SECTION 3.03.  OATH.  Each director shall file the statement
    6-1  and take the constitutional oath of office required of state
    6-2  officers.
    6-3        SECTION 3.04.  ORGANIZATION OF BOARD.  (a)  After each annual
    6-4  appointment of directors, the board shall hold a regular meeting in
    6-5  September at the district office and shall organize by electing
    6-6  from the members of the board one person to serve as vice-chairman
    6-7  and one person to serve as secretary.  The board may elect other
    6-8  officers it considers necessary.  The executive committee of the
    6-9  Middle Rio Grande Development Council shall appoint from the
   6-10  members of the board one person to serve as chairman.
   6-11        (b)  Each officer  serves in that capacity for a term of two
   6-12  years.
   6-13        (c)  The chairman shall preside over meetings of the board,
   6-14  and in the chairman's absence the vice-chairman shall preside.
   6-15        (d)  The chairman, vice-chairman, and secretary shall perform
   6-16  the duties and may exercise the powers specifically given them by
   6-17  this Act or by orders of the board.
   6-18        SECTION 3.05.  MEETING AND ACTIONS OF THE BOARD.  (a)  The
   6-19  board shall hold a regular meeting quarterly or more often and may
   6-20  meet at any other time as provided by the bylaws.
   6-21        (b)  A majority of the members of the board constitute a
   6-22  quorum for the transaction of business of the district.
   6-23        (c)  Except as otherwise provided by this Act, the vote of a
   6-24  majority of directors is required for board action.
   6-25        (d)  The board shall adopt bylaws at its first meeting or as
   6-26  soon after the first meeting as practicable.  The board's bylaws
   6-27  must prescribe the powers, duties, and procedures for removal from
    7-1  a board office.
    7-2        SECTION 3.06.  CONFLICT OF INTEREST.  The laws relating to a
    7-3  conflict of interest that apply to a local public official apply to
    7-4  a director appointed under this Act.
    7-5        SECTION 3.07.  DIRECTOR'S COMPENSATION.  (a)  A director is
    7-6  entitled to receive $100 a day and reimbursement for actual and
    7-7  necessary expenses incurred:
    7-8              (1)  for each day the director attends meetings of the
    7-9  board; and
   7-10              (2)  for each day the director attends to the business
   7-11  of the district that is authorized by board resolution or motion.
   7-12        (b)  A director is not entitled to receive a per diem
   7-13  allowance for more than 52 days in any one calendar year.
   7-14        SECTION 3.08.  GENERAL MANAGER; PERSONNEL.  The board may
   7-15  employ a general manager and other personnel for a term and salary
   7-16  set by the board.
   7-17        SECTION 3.09.  EMPLOYEE'S BONDS.  (a)  The general manager
   7-18  and each employee of the district charged with the collection,
   7-19  custody, or payment of any money of the district shall execute a
   7-20  fidelity bond.  The board shall approve the form, amount, and
   7-21  surety of the bond.
   7-22        (b)  The district shall pay the premiums on the employees'
   7-23  bonds under this section.
   7-24        SECTION 3.10.  PRINCIPAL OFFICE.  The district shall maintain
   7-25  its principal office inside the district's boundaries.
   7-26        SECTION 3.11.  RECORDS.  (a)  The district shall keep
   7-27  complete and accurate accounts of its business transactions in
    8-1  accordance with generally accepted methods of accounting.
    8-2        (b)  The district shall keep complete and accurate minutes of
    8-3  its meetings.
    8-4        (c)  The district shall maintain its accounts, contracts,
    8-5  documents, minutes, and other records at its principal office.
    8-6        (d)  Neither the board nor its employees may disclose a
    8-7  district record that relates to trade secrets or the economics of
    8-8  an industry's operations.
    8-9        SECTION 3.12.  SUITS.  The district may, through its board,
   8-10  sue and be sued in any court of this state in the name of the
   8-11  district.  Service of process in a suit may be had by serving the
   8-12  general manager or other officers appointed by the board.
   8-13        SECTION 3.13.  SEAL.  The board shall adopt a seal for the
   8-14  district and may alter the form of the seal from time to time.
   8-15                ARTICLE 4.  DISTRICT POWERS AND DUTIES
   8-16        SECTION 4.01.  GENERAL POWERS.  (a)  Except as otherwise
   8-17  provided by this Act, the district has all the rights, powers,
   8-18  privileges, authority, and functions conferred by the general law
   8-19  of this state on districts created under Article XVI, Section 59,
   8-20  of the Texas Constitution.
   8-21        (b)  If any provision of the general law is in conflict or
   8-22  inconsistent with this Act, this Act prevails.  Any general law not
   8-23  in conflict or inconsistent with this Act is adopted and
   8-24  incorporated by reference.
   8-25        SECTION 4.02.  REQUIREMENTS OF OTHER LAW.  The district shall
   8-26  comply with the licensing, monitoring, and reporting requirements
   8-27  prescribed by law in connection with the collection and disposal of
    9-1  solid waste.
    9-2        SECTION 4.03.  SPECIFIC POWERS.  (a)  The district has the
    9-3  powers necessary or convenient to carry out and effect the purposes
    9-4  and provisions of this Act, including the powers granted in this
    9-5  section.
    9-6        (b)  The district may:
    9-7              (1)  own, operate, develop, control, purchase,
    9-8  construct, lease, or acquire real or personal property, collection
    9-9  and disposal facilities, works, systems and equipment, solid waste
   9-10  disposal sites, and any other asset required or necessary, whether
   9-11  previously existing or to be made, developed, constructed, or
   9-12  acquired, inside or outside the boundaries of the district, that
   9-13  the board finds is necessary or convenient to carry out this Act;
   9-14              (2)  enter into contracts with a person or entity,
   9-15  public or private, on terms and conditions the board considers
   9-16  desirable, fair, and advantageous to:
   9-17                    (A)  provide for the operation, monitoring,
   9-18  maintenance, professional services, employment, franchise, leasing,
   9-19  development, research, marketing, distribution, and collection and
   9-20  disposal of solid waste;
   9-21                    (B)  transport, treat, and dispose of the
   9-22  district's solid waste or to transport, treat, and dispose of the
   9-23  solid waste of others;
   9-24                    (C)  purchase, lease, use, manage, control, or
   9-25  operate solid waste disposal and collection systems and facilities,
   9-26  all or part of which may be owned by other political subdivisions
   9-27  or a private business in accordance with the terms and conditions
   10-1  that are mutually agreed on by the contracting parties;
   10-2                    (D)  obtain grants or loans, plan, and make
   10-3  preliminary surveys, investigations, feasibility reports,
   10-4  engineering reports, and economic and environmental analyses of any
   10-5  kind or character;
   10-6              (3)  acquire, develop, contract for, and use railroad
   10-7  and water transportation facilities, incineration facilities, and
   10-8  oil, natural gas, electricity, or water resources;
   10-9              (4)  enforce or defend by any legal proceeding the
  10-10  board considers advisable any of the rights or powers granted by
  10-11  this Act and the general laws of the state;
  10-12              (5)  enter into contracts that may be negotiated or
  10-13  subject to competitive bidding if the district considers
  10-14  competitive bidding desirable, fair, and advantageous to the
  10-15  district; and
  10-16              (6)  sell or acquire license franchise, easements, real
  10-17  property, or other property within or without its boundaries for
  10-18  the accomplishment of its powers and purposes through its right of
  10-19  purchase.
  10-20        SECTION 4.04.  FACILITY SPECIFICATIONS.  (a)  The district
  10-21  may establish a standard specification for facilities that are
  10-22  designed or constructed to provide for the collection and disposal
  10-23  of solid waste within the district.  The specifications may not
  10-24  apply to a facility that is in existence on the effective date of
  10-25  this Act unless the district acquires the facility.
  10-26        (b)  The district may seek injunctive relief against the
  10-27  maintenance, operation, or construction of a solid waste disposal
   11-1  or collection business, system, or facility within the district
   11-2  that is not exempted by this Act or that does not meet the
   11-3  standards and specifications the district has approved.
   11-4        (c)  The standards and specifications, when approved, may not
   11-5  conflict with a licensing, monitoring, or administrative provision
   11-6  prescribed by law.
   11-7        SECTION 4.05.  CERTAIN CONTRACTS.  The district may contract
   11-8  with a municipality or county for solid waste collection and
   11-9  disposal without the necessity of an election by a contracting
  11-10  party and without the requirement of competitive bidding.
  11-11        SECTION 4.06.  LIMITATION OF POWERS.  The district may not:
  11-12              (1)  impose a tax;
  11-13              (2)  exercise the power of eminent domain;
  11-14              (3)  close an existing municipal or county disposal
  11-15  site or collection facility;
  11-16              (4)  issue general obligation bonds; or
  11-17              (5)  obligate municipal or county revenues or property
  11-18  for debt.
  11-19        SECTION 4.07.  LIABILITY OF MUNICIPALITY OR COUNTY.  The
  11-20  district shall hold a municipality or county participating in the
  11-21  district harmless from any tort or contractual liability for which
  11-22  the municipality or county may be sued as a result of the district
  11-23  pursuing the purposes established by this Act.
  11-24         ARTICLE 5.  POLLUTION CONTROL AND ABATEMENT DISTRICTS
  11-25        SECTION 5.01.  ESTABLISHMENT.  (a)  The district may
  11-26  establish one or more pollution control and abatement districts to
  11-27  accomplish any of the powers, purposes, rights, privileges, or
   12-1  authority vested in the district by this Act.
   12-2        (b)  The district shall establish the procedure by which a
   12-3  pollution control and abatement district may be created.
   12-4        SECTION 5.02.  BOUNDARIES.  The boundaries of a pollution
   12-5  control and abatement district may include any territory within the
   12-6  district with the consent of each county or municipality in which
   12-7  the pollution control and abatement district is located.
   12-8        SECTION 5.03.  TAX.  A pollution control and abatement
   12-9  district may not levy a tax.
  12-10        SECTION 5.04.  DEBT.  (a)  The district may incur
  12-11  indebtedness necessary to provide for a pollution control and
  12-12  abatement district and for the improvements and maintenance of the
  12-13  district.
  12-14        (b)  The district may issue revenue bonds as provided by
  12-15  Article 7 of this Act for a pollution control and abatement
  12-16  district.
  12-17                 ARTICLE 6.  GENERAL FISCAL PROVISIONS
  12-18        SECTION 6.01.  DISBURSEMENT OF FUNDS.  The district may
  12-19  disburse funds only by check, draft, order, or other instrument
  12-20  signed by the person or persons authorized to do so in the board's
  12-21  bylaws or by resolution of the board.
  12-22        SECTION 6.02.  FEES AND CHARGES.  The district shall
  12-23  establish fees and charges according to the conditions and
  12-24  requirements established by the board.
  12-25        SECTION 6.03.  AUTHORITY TO BORROW.  (a)  The district may
  12-26  borrow money for the purposes prescribed by this Act.
  12-27        (b)  The district may borrow money and accept grants from
   13-1  private sources, the federal government, the state, and local
   13-2  governments.
   13-3        (c)  The district may enter into any agreement in connection
   13-4  with a loan or grant that does not conflict with the constitution
   13-5  or laws of this state.
   13-6        (d)  The source of funds accepted by the district is public
   13-7  information both as to amount and as to any restrictions placed by
   13-8  the donor on expenditure.
   13-9        SECTION 6.04.  FISCAL YEAR.  (a)  The district operates on
  13-10  the fiscal year established by the board.
  13-11        (b)  The fiscal year may not be changed more than once in a
  13-12  24-month period.
  13-13        SECTION 6.05.  AUDIT BY STATE AUDITOR.  (a)  The board shall
  13-14  keep separate books and accounts for all money received from the
  13-15  state and the state auditor shall annually audit the books and
  13-16  accounts so that the auditor may report to the legislature the
  13-17  manner in and purpose for which the district spent money received
  13-18  from the state during each fiscal year.
  13-19        (b)  The state auditor shall promptly make the report
  13-20  required under Subsection (a) of this section and shall file a copy
  13-21  of the report with the governor, the Texas Natural Resource
  13-22  Conservation Commission, and the governing body of each county and
  13-23  municipality included in the district.  The state auditor shall
  13-24  also file other copies required by law.
  13-25        (c)  After completing the audit and the required report, the
  13-26  state auditor shall prepare a detailed statement of the actual cost
  13-27  of the audit and certify the statement to the district for payment.
   14-1  On receipt of the statement, the district shall pay the state
   14-2  treasurer the cost of the audit.  The state treasurer shall credit
   14-3  the payment to the general revenue fund.
   14-4        SECTION 6.06.  ACCOUNTS AND INDEPENDENT AUDIT.  (a)  The
   14-5  district shall keep a complete system of accounts.
   14-6        (b)  Annually, the board shall have an audit made of the
   14-7  financial condition of the district prepared by an independent
   14-8  certified public accountant, or a firm of independent certified
   14-9  public accountants, selected by the board and of recognized
  14-10  integrity and ability.
  14-11        (c)  The district shall pay the costs of the audit.
  14-12        (d)  The district shall file copies of the independent audit
  14-13  with the governor, the commissioners court of each county in the
  14-14  district, the city clerk of each municipality in the district, and
  14-15  any other agency, commission, or authority required by law.
  14-16        (e)  The board shall keep at least one copy of the audit at
  14-17  the offices of the district open to inspection by any interested
  14-18  person during normal office hours.
  14-19        SECTION 6.07.  Depository.  (a)  The board shall name one or
  14-20  more banks in the district to serve as depository for district
  14-21  funds.
  14-22        (b)  District funds, other than those transmitted to a bank
  14-23  of payment for bonds issued by the district, shall be deposited as
  14-24  received with the depository bank and must remain on deposit.
  14-25        (c)  Before the district deposits funds in a bank in an
  14-26  amount that exceeds the maximum amount secured by the Federal
  14-27  Deposit Insurance Corporation, the bank must execute a bond or
   15-1  provide other security in an amount sufficient to secure from loss
   15-2  the district's funds that exceed the amount secured by the Federal
   15-3  Deposit Insurance Corporation.
   15-4        (d)  If the board cannot negotiate favorable terms and
   15-5  conditions for the handling of district funds with a bank in the
   15-6  district, the board may designate one or more banks outside the
   15-7  district on the terms and conditions the district finds to be
   15-8  advantageous.
   15-9                           ARTICLE 7.  BONDS
  15-10        SECTION 7.01.  AUTHORITY TO ISSUE BONDS.  The board may issue
  15-11  and sell bonds in the name of the district to acquire land and
  15-12  construct works and improvements and waste disposal, treatment, and
  15-13  other facilities, plants, pipelines, equipment, and appliances as
  15-14  provided by this Act.
  15-15        SECTION 7.02.  BOND PAYMENT.  The board may provide for the
  15-16  payment of the principal of and interest on the bonds by pledging
  15-17  all or part of the designated revenues from the ownership or
  15-18  operation of the district's works, improvements, and facilities.
  15-19        SECTION 7.03.  TERMS; FORM.  (a)  The district may issue its
  15-20  bonds in various series or issues.
  15-21        (b)  Bonds may mature serially or otherwise not more than 50
  15-22  years after the date of issuance and shall bear interest at a rate
  15-23  permitted by state law.
  15-24        (c)  The district's bonds and interest coupons, if any, are
  15-25  investment securities under the terms of Chapter 8, Business &
  15-26  Commerce Code, and may be issued registrable as to principal or as
  15-27  to principal and interest or may be issued in book entry form and
   16-1  may be made redeemable before maturity at the option of the
   16-2  district or may contain a mandatory redemption provision.
   16-3        (d)  The district's bonds may be issued in the form,
   16-4  denominations, and manner and under the terms, conditions, and
   16-5  details and shall be signed and executed as provided by the board
   16-6  in the resolution or order authorizing the bonds.
   16-7        SECTION 7.04.  BOND PROVISIONS.  (a)  In the orders or
   16-8  resolutions authorizing the issuance of bonds, including refunding
   16-9  bonds, the board may provide for the flow of funds, the
  16-10  establishment and maintenance of the interest and sinking fund, the
  16-11  reserve fund, and other funds and may make additional covenants
  16-12  with respect to the bonds and the pledged fees.
  16-13        (b)  The orders or resolutions of the board authorizing the
  16-14  issuance of bonds may prohibit the further issuance of bonds or
  16-15  other obligations payable from the pledged fees or may reserve the
  16-16  right to issue additional bonds to be secured by a pledge of and
  16-17  payable from the fees on a parity with or subordinate to the pledge
  16-18  in support of the bonds being issued.
  16-19        (c)  The orders or resolutions of the board issuing bonds may
  16-20  contain other provisions and covenants as the board may determine.
  16-21        (d)  The board may adopt and have executed any other
  16-22  proceedings or instruments necessary and convenient in the issuance
  16-23  of bonds.
  16-24        SECTION 7.05.  APPROVAL AND REGISTRATION.  (a)  Bonds issued
  16-25  by the district and the records relating to their issuance must be
  16-26  submitted to the attorney general for examination as to their
  16-27  validity.
   17-1        (b)  If the attorney general finds that the bonds have been
   17-2  authorized in accordance with the law, the attorney general shall
   17-3  approve them, and the comptroller of public accounts shall register
   17-4  the bonds.
   17-5        (c)  Following approval and registration, the bonds are
   17-6  incontestable and are binding obligations according to their terms.
   17-7        SECTION 7.06.  REFUNDING BONDS.  (a)  Refunding bonds of the
   17-8  district may be issued to refund and pay off an outstanding
   17-9  indebtedness the district has issued or assumed.
  17-10        (b)  The bonds must be issued in the manner provided by
  17-11  Chapter 784, Acts of the 61st Legislature, Regular Session, 1969
  17-12  (Article 717k-3, Vernon's Texas Civil Statutes).
  17-13        (c)  The refunding bonds may be sold and the proceeds applied
  17-14  to the payment of outstanding indebtedness or may be exchanged in
  17-15  whole or in part for not less than a similar principal amount of
  17-16  outstanding indebtedness.  If the refunding bonds are to be sold
  17-17  and the proceeds applied to the payment of outstanding
  17-18  indebtedness, the refunding bonds must be issued and payments made
  17-19  in the manner provided by Chapter 503, Acts of the 54th
  17-20  Legislature, Regular Session, 1955 (Article 717k, Vernon's Texas
  17-21  Civil Statutes).
  17-22        SECTION 7.07.  LEGAL INVESTMENTS; SECURITY FOR DEPOSITS.  (a)
  17-23  District bonds are legal and authorized investments for:
  17-24              (1)  a bank;
  17-25              (2)  a savings bank;
  17-26              (3)  a trust company;
  17-27              (4)  a savings and loan association;
   18-1              (5)  an insurance company;
   18-2              (6)  a fiduciary;
   18-3              (7)  a trustee;
   18-4              (8)  a guardian; and
   18-5              (9)  the sinking fund of a municipality, county, school
   18-6  district, or other political subdivision of the state and other
   18-7  public funds of the state and its agencies, including the permanent
   18-8  school fund.
   18-9        (b)  District bonds may secure deposits of public funds of
  18-10  the state or a municipality, county, school district, or other
  18-11  political subdivision of the state.  The bonds are lawful and
  18-12  sufficient security for deposits to the extent of their value, if
  18-13  accompanied by all unmatured coupons.
  18-14        SECTION 7.08.  APPLICATION OF OTHER LAWS.  Bonds of the
  18-15  district are considered bonds under the Bond Procedures Act of 1981
  18-16  (Article 717k-6, Vernon's Texas Civil Statutes).
  18-17        SECTION 7.09.  TAX STATUS OF BONDS.  Since the district
  18-18  created under this chapter is a public entity performing an
  18-19  essential public function, bonds issued by the district, any
  18-20  transaction relating to the bonds, and profits made in the sale of
  18-21  the bonds are free from taxation by the state or by a municipality,
  18-22  county, special district, or other political subdivision of the
  18-23  state.
  18-24                 ARTICLE 8.  MISCELLANEOUS PROVISIONS
  18-25        SECTION 8.01.  TRANSITION.  The reference in Section 6.05 of
  18-26  this Act to the Texas Natural Resource Conservation Commission
  18-27  means the Texas Water Commission until the name of the Texas Water
   19-1  Commission is changed to the Texas Natural Resource Conservation
   19-2  Commission as provided by Section 1.085, Chapter 3, Acts of the
   19-3  72nd Legislature, 1st Called Session, 1991.
   19-4        SECTION 8.02.  EMERGENCY.  The importance of this legislation
   19-5  and the crowded condition of the calendars in both houses create an
   19-6  emergency and an imperative public necessity that the
   19-7  constitutional rule requiring bills to be read on three several
   19-8  days in each house be suspended, and this rule is hereby suspended,
   19-9  and that this Act take effect and be in force from and after its
  19-10  passage, and it is so enacted.