By Howard                                             H.B. No. 3194
         77R9463 MI-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the creation, administration, powers, duties,
 1-3     operation, and financing of the Fort Bend County Levee Improvement
 1-4     District Number 16 and to the authorization of bonds and the levy
 1-5     of taxes; providing civil penalties.
 1-6           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-7                       ARTICLE 1.  GENERAL PROVISIONS
 1-8           SECTION 1.01. CREATION.  (a)  A levee improvement district,
 1-9     to be known as Fort Bend County Levee Improvement District Number
1-10     16, is created.  The district is a governmental agency and a body
1-11     politic and corporate.
1-12           (b)  The district is created under and is essential to
1-13     accomplish the purposes of Section 59, Article XVI, Texas
1-14     Constitution.
1-15           (c)  The district has the powers of a levee improvement
1-16     district as provided by Chapter 57, Water Code, and is governed by
1-17     Chapters 49 and 57, Water Code, unless otherwise provided by this
1-18     Act.
1-19           SECTION 1.02.  DEFINITIONS.  In this Act:
1-20                 (1)  "County" means Fort Bend County.
1-21                 (2)  "District" means the Fort Bend County Levee
1-22     Improvement District Number 16.
1-23                 (3)  "Board" means the board of directors of the Fort
1-24     Bend County Levee Improvement District Number 16.
 2-1                 (4)  "Commissioners court" means the Fort Bend County
 2-2     Commissioners Court.
 2-3           SECTION 1.03.  BOUNDARIES.  (a)  The district includes the
 2-4     territory contained within the following area:
 2-5           Being 2321.591 acres of land located in the M.M. Battle
 2-6     League, Abstract 9 and the Alexander Hodges League Abstract 32,
 2-7     Fort Bend County, Texas, more particularly being all of those
 2-8     certain tracts called 389.137, 282.759 and 960.718 acres described
 2-9     as Exhibit A-6, Exhibit A-7 and Exhibit A-9, respectively, and a
2-10     portion of that certain tract called 1093.65 acres, described as
2-11     Exhibit A-8, all conveyed to The State of Texas, State Department
2-12     of Highways and Public Transportation by an instrument of record in
2-13     Volume 2329, Page 50 of the Official Records of Fort Bend County,
2-14     Texas (F.B.C.O.R.), said 2321.591 acres being more particularly
2-15     described in two (2) parts by metes and bounds as follows (all
2-16     bearings based on the Texas State Plane Coordinate System, South
2-17     Central Zone);
2-18                                   PART 1
2-19                               1651.115 ACRES
2-20           BEGINNING at the intersection of the east line of the
2-21     aforementioned 389.137 acres described as Exhibit A-6 and the
2-22     proposed southerly right-of-way line of Texas State Highway No. 6
2-23     (S.H. 6) (width varies);
2-24           Thence, South 01 50'42" East, 7190.30 feet to a point for
2-25     corner in the northerly right-of-way line of U.S. 59 (width
2-26     varies);
2-27           Thence, with said northerly right-of-way line of U.S. 59 the
 3-1     following eighteen (18) courses:
 3-2           1)  South 52 31'20" West, 1040.87 feet to a point for corner;
 3-3           2)  South 48 11'45" West, 187.66 feet to a point for corner;
 3-4           3)  South 52 31'25" West, 848.96 feet to a point for corner;
 3-5           4)  South 74 54'21" West, 252.91 feet to a point for corner;
 3-6           5)  South 86 11'04" West, 495.72 feet to a point for corner;
 3-7           6)  North 49 03'57" West, 35.29 feet to a point for corner;
 3-8           7)  South 86 00'42" West, 160.00 feet to a point for corner;
 3-9           8)  South 28 16'44" West, 33.59 feet to a point for corner,
3-10               the beginning of a curve whose center bears South
3-11               11 45'03" East;
3-12           9)  605.23 feet along the arc of a curve to the left having a
3-13               radius of 423.00 feet, a central angle of 81 58'45" and a
3-14               chord which bears South 37 15'34" West, 554.91 feet to a
3-15               point for corner at the end of said curve;
3-16           10)  South 03 40'10" East, 10.57 feet to a point for corner,
3-17                the beginning of a curve whose center bears South
3-18                86 11'10" West;
3-19           11)  521.28 feet along the arc of a curve to the right having
3-20                a radius of 875.69 feet, a central angle of 34 06'26"
3-21                and a chord which bears South 13 14'23" West, 513.62
3-22                feet to a point for corner at the end of said curve;
3-23           12)  South 52 29'44" West, 925.05 feet to a point for corner;
3-24           13)  South 52 29'36" West, 435.64 feet to a point for corner;
3-25           14)  South 57 03'57" West, 199.79 feet to a point for corner;
3-26           15)  South 52 30'48" West, 1944.36 feet to a point for
3-27                corner;
 4-1           16)  South 50 57'50" West, 904.84 feet to a point for corner;
 4-2           17)  South 54 07'20" West, 1094.20 feet to a point for
 4-3                corner;
 4-4           18)  South 52 33'57" West, 329.02 feet to a point for corner;
 4-5           Thence, North 03 12'03" West, 3818.53 feet to a point for
 4-6     corner;
 4-7           Thence, North 86 36'48" East, 1806.43 feet to a point for
 4-8     corner;
 4-9           Thence North 03 32'23" West, 9500.81 feet to a point for
4-10     corner in the southerly right-of-way line of U.S. Highway No. 90-A;
4-11           Thence, with said southerly right-of-way line of U.S. Highway
4-12     No. 90-A the following eight (8) courses:
4-13           1)  North 65 39'06" East, 256.30 feet to a point for corner,
4-14               the beginning of a curve whose center bears North
4-15               24 31'32" West;
4-16           2)  680.54 feet along the arc of a curve to the left having a
4-17               radius of 6043.20 feet, a central angle of 06 27'08" and
4-18               a chord which bears North 62 24'54" East, 680.18 feet to
4-19               a point for corner;
4-20           3)  North 59 11'59" East, 1248.35 feet to a point for corner;
4-21           4)  North 68 00'20" East, 590.07 feet to a point for corner;
4-22           5)  North 74 12'26" East, 439.68 feet to a point for corner;
4-23           6)  North 80 01'35" East, 189.98 feet to a point for corner;
4-24           7)  North 86 16'10" East, 499.86 feet to a point for corner;
4-25           8)  South 84 07'12" East, 296.42 feet to a point for corner,
4-26               the beginning of a curve whose center bears North
4-27               45 54'16" East, said point being in the aforementioned
 5-1               proposed southerly right-of-way line of S.H. 6;
 5-2           Thence, with said proposed southerly right-of-way line of
 5-3     S.H. 6 the following eleven (11) courses;
 5-4           1)  417.214 feet along the arc of a curve to the left having
 5-5               a radius of 1954.86 feet, a central angle of 12 13'45"
 5-6               and a chord which bears South 50 12'36" East, 416.45 feet
 5-7               to a point for corner at the end of said curve;
 5-8           2)  South 55 56'26" East, 752.00 feet to a point for corner,
 5-9               the beginning of a curve whose center bears North
5-10               36 23'44" East;
5-11           3)  116.03 feet along the arc of a curve to the left having a
5-12               radius of 2844.79 feet, a central angle of 02 20'13" and
5-13               a chord which bears South 54 46'22" East, 116.02 feet to
5-14               a point for corner;
5-15           4)  South 48 54'25" East, 174.14 feet to a point for corner;
5-16           5)  South 52 44'28" East, 316.76 feet to a point for corner;
5-17           6)  South 07 44'31" East, 31.13 feet to a point for corner;
5-18           7)  South 62 33'17" East, 162.37 feet to a point for corner;
5-19           8)  North 84 27'47" East, 27.26 feet to a point for corner,
5-20               the beginning of a curve whose center bears North
5-21               36 36'08" East;
5-22           9)  288.78 feet along the arc of a curve to the left having a
5-23               radius of 2897.80 feet, a central angle of 05 42'35" and
5-24               a chord which bears South 56 15'10" East, 288.66 feet to
5-25               a point for corner at the end of said curve;
5-26           10)  South 59 06'29" East, 683.96 feet to a point for corner,
5-27                the beginning of a curve;
 6-1           11)  185.98 fee along the arc of a tangent curve to the right
 6-2                having a radius of 2844.79 feet, a central angle of
 6-3                03 44'45" and a chord which bears South 57 14'05" East,
 6-4                185.95 feet to the POINT OF BEGINNING and containing
 6-5                1651.115 acres of land.
 6-6                                   PART 2
 6-7                                670.476 ACRES
 6-8           BEGINNING at the intersection of the east line of the
 6-9     aforementioned 1093.65 acres described as Exhibit A-8 and the
6-10     southerly right-of-way line of aforementioned U.S. 59 from which
6-11     the southeast corner of the above described Part 1 bears North
6-12     01 53'45" West, 550.74 feet;
6-13           Thence, South 01 50'42" East, 3087.21 feet to a point for
6-14     corner;
6-15           Thence, North 87 11'58" East, 619.44 feet to a point for
6-16     corner;
6-17           Thence, South 01 55'19" East, 4421.32 feet to a point for
6-18     corner;
6-19           Thence, South 88 02'21" West, 300.99 feet to a point for
6-20     corner;
6-21           Thence, South 01 51'04" East, 976.57 feet to a point for
6-22     corner, the beginning of a curve whose center bears North 37 15'45"
6-23     East;
6-24           Thence, 1227.88 feet along the arc of a curve to the right
6-25     having a radius of 2891.80 feet, a central angle of 24 19'42" and a
6-26     chord which bears North 40 34'24" West, 1218.68 feet to a point for
6-27     corner at the end of said curve;
 7-1           Thence, North 28 24'33" West, 378.96 feet to a point for
 7-2     corner;
 7-3           Thence, North 54 53'42" West, 516.66 feet to a point for
 7-4     corner;
 7-5           Thence, North 70 18'35" West, 1318.58 feet to a point for
 7-6     corner;
 7-7           Thence, North 78 25'45" West, 966.06 feet to a point for
 7-8     corner;
 7-9           Thence, South 89 02'49" West, 2421.07 feet to a point for
7-10     corner;
7-11           Thence, North 77 32'21" West, 496.91 feet to a point for
7-12     corner;
7-13           Thence, North 33 55'33" West, 888.23 feet to a point for
7-14     corner;
7-15           Thence, North 79 49'48" West, 442.63 feet to a point for
7-16     corner;
7-17           Thence, North 42 56'06" West, 75.28 feet to a point for
7-18     corner in the aforementioned southerly right-of-way line of U.S.
7-19     59;
7-20           Thence, with said southerly right-of-way line of U.S. 59 the
7-21     following sixteen (16) courses:
7-22           1)  North 50 57'50" East, 1689.20 feet to a point for corner;
7-23           2)  North 52 30'48" East, 1921.22 feet to a point for corner;
7-24           3)  North 57 03'57" East, 199.96 feet to a point for corner;
7-25           4)  North 52 29'36" East, 453.80 feet to a point for corner;
7-26           5)  North 52 29'44" East, 400.00 feet to a point for corner;
7-27           6)  North 76 03'27" East, 339.22 feet to a point for corner;
 8-1           7)  North 86 05'07" East, 374.89 feet to a point for corner;
 8-2           8)  South 49 10'00" East, 35.51 feet to a point for corner;
 8-3           9)  North 86 05'08" East, 150.00 feet to a point for corner;
 8-4           10)  North 40 50'00" East, 35.20 feet to a point for corner;
 8-5           11)  North 86 05'08" East, 31.60 feet to a point for corner,
 8-6                the beginning of a curve;
 8-7           12)  663.95 feet along the arc of a tangent curve to the left
 8-8                having a radius of 423.00 feet, a central angle of
 8-9                89 56'00" and a chord which bears North 41 07'08" East,
8-10                597.86 feet to a point for corner;
8-11           13)  North 03 52'55" West, 10.00 feet to a point for corner,
8-12                the beginning of a curve whose center bears North
8-13                86 14'21" East;
8-14           14)  576.71 feet along the arc of a curve to the right having
8-15                a radius of 877.19 feet, a central angle of 37 40'10"
8-16                and a chord which bears North 15 04'26" East, 566.38
8-17                feet to a point for corner at the end of said curve;
8-18           15)  North 52 31'23" East, 1291.14 feet to a point for
8-19                corner;
8-20           16)  North 51 33'03" East, 886.94 feet to the POINT OF
8-21                BEGINNING and containing 670.476 acres of land.
8-22           Said Part 1 and Part 2 containing a total of 2321.591 acres
8-23     of land.
8-24           (b)  A mistake in the patents or field notes or in copying
8-25     the patents or field notes in the legislative process does not
8-26     affect the organization, existence, or validity of the district,
8-27     the right of the district to issue bonds or refunding bonds or to
 9-1     pay the principal of or interest on issued bonds, the right of the
 9-2     district to levy and collect taxes, or the legality or operation of
 9-3     the district or its governing board.
 9-4                    ARTICLE 2.  ADMINISTRATIVE PROVISIONS
 9-5           SECTION 2.01.  BOARD.  (a)  The district is governed by a
 9-6     board of three directors appointed by the commissioners court.
 9-7           (b)  Except for initial directors, directors serve staggered
 9-8     four-year terms, with the terms of one or two directors expiring
 9-9     September 1 of each even-numbered year.
9-10           (c)  Initial directors shall serve until permanent directors
9-11     are appointed under Section 2.04 of this Act and qualified as
9-12     required by Subsection (e) of this section.
9-13           (d)  A director serves until the director's successor has
9-14     qualified as required by Subsection (e) of this section.
9-15           (e)  A director must qualify to serve as required by Section
9-16     49.055, Water Code.
9-17           SECTION 2.02.  DIRECTOR ELIGIBILITY.  (a)  Except for initial
9-18     directors, a person must meet the requirements of Section 57.059,
9-19     Water Code, to be eligible to serve as a director.  A person must
9-20     be at least 18 years of age and a resident of Fort Bend County or
9-21     Travis County to be eligible to serve as an initial director.
9-22           (b)  Notwithstanding Section 49.052, Water Code, employment
9-23     with a state agency, other than the Texas Department of
9-24     Transportation, the General Land Office, or the School Land Board,
9-25     does not disqualify a person from serving as a director.
9-26           (c)  An employee of the district may not serve as a director.
9-27           SECTION 2.03.  APPOINTMENT OF INITIAL DIRECTORS. (a)  The
 10-1    School Land Board shall appoint three initial directors as soon as
 10-2    practicable after the effective date of this Act.  The School Land
 10-3    Board shall appoint one initial director to serve a term expiring
 10-4    September 1, 2002, and two initial directors to serve terms
 10-5    expiring September 1, 2004.
 10-6          (b)  If a vacancy occurs, the School Land Board shall appoint
 10-7    a successor to fill the vacancy and to serve the remainder of the
 10-8    unexpired term.
 10-9          SECTION 2.04.  APPOINTMENT OF PERMANENT DIRECTORS.  The
10-10    commissioners court shall appoint one permanent director to serve a
10-11    four-year term beginning September 1, 2002, and two permanent
10-12    directors to serve four-year terms beginning September 1, 2004.
10-13    Every subsequent second year, the commissioners court shall appoint
10-14    the appropriate number of directors.
10-15          SECTION 2.05.  MEETINGS AND BOARD ACTIONS. (a)  The board may
10-16    establish regular meetings to conduct the business of the district
10-17    and may hold special meetings if necessary as determined by the
10-18    board.  The board shall hold a meeting under this section within
10-19    the district unless the board, by a majority vote at a public
10-20    meeting, decides to hold the meeting outside of the district.
10-21          (b)  The board may adopt bylaws to govern the affairs of the
10-22    district.
10-23          SECTION 2.06. APPOINTMENT OF BOARD SECRETARY AND TREASURER.
10-24    The board shall appoint a secretary and treasurer.  The  secretary
10-25    and treasurer may be, but are not required to be, members of the
10-26    board.  One person may serve as both secretary and treasurer.
10-27          SECTION 2.07.  CONFLICT OF INTEREST: CONTRACT.  A director
 11-1    who is financially interested in a contract that is proposed to be
 11-2    executed by the board for the purchase of property or services or
 11-3    for the construction of facilities shall disclose the director's
 11-4    interest to the board and may not vote on the acceptance of the
 11-5    contract.
 11-6          SECTION 2.08.  DISTRICT EMPLOYEES.  The board may employ a
 11-7    general manager and consulting engineers, financial consultants,
 11-8    attorneys, and auditors.  The general manager shall be responsible
 11-9    for:
11-10                (1)  administering the board's directives;
11-11                (2)  maintaining district records, including minutes of
11-12    board meetings;
11-13                (3)  coordinating with federal, state, and local
11-14    agencies;
11-15                (4)  developing plans and programs for the board's
11-16    approval;
11-17                (5)  hiring, supervising, training, and discharging the
11-18    district's employees;
11-19                (6)  obtaining technical, scientific, legal, fiscal, or
11-20    other professional services for the district; and
11-21                (7)  performing other duties as assigned by the board. 
11-22          SECTION 2.09.  EMPLOYEE BONDS.  (a)  The general manager and
11-23    each employee of the district who is charged with the collection,
11-24    custody, or payment of district money shall execute a fidelity bond
11-25    in an amount determined by the board and in a form and with a
11-26    surety approved by the board.
11-27          (b)  The district shall pay the premium on a bond under this
 12-1    section.
 12-2          SECTION 2.10.  PRINCIPAL OFFICE.  (a)  If the district has
 12-3    not issued bonds, the district may maintain its principal office in
 12-4    Fort Bend County or Travis County.  If the district maintains its
 12-5    principal office in Travis County, the district shall maintain
 12-6    duplicates of district records in Fort Bend County and make the
 12-7    duplicate records available for inspection during regular business
 12-8    hours.
 12-9          (b)  If the district has issued bonds, the district shall
12-10    maintain its principal office in Fort Bend County.
12-11          SECTION 2.11.  RECORDS.  (a)  The district shall keep at its
12-12    principal office:
12-13                (1)  a complete and accurate account of the district's
12-14    business transactions in accordance with generally accepted
12-15    accounting methods;
12-16                (2)  a complete and accurate record of the minutes of
12-17    board meetings; and
12-18                (3)  contracts, documents, and other records of the
12-19    district.
12-20          (b)  The district shall permit reasonable public inspection
12-21    of the district's records during regular business hours.
12-22                     ARTICLE 3.  AUTHORITY OF DISTRICT
12-23          SECTION 3.01.  POWERS AND DUTIES.  The district shall
12-24    administer and enforce the provisions of this Act and use the
12-25    facilities and powers of the district to accomplish the purposes of
12-26    this Act and Chapter 57, Water Code.
12-27          SECTION 3.02.  DISTRICT RULES.  (a)  The district may adopt
 13-1    and enforce rules reasonably required to implement this Act,
 13-2    including rules governing procedure and practice before the board. 
 13-3          (b)  The district shall keep a record of the district's rules
 13-4    and provide a copy of the rules to a person on written request.
 13-5          SECTION 3.03.  INSPECTIONS AND INVESTIGATIONS.  In addition
 13-6    to the powers provided by Section 49.221, Water Code, the district
 13-7    may enter public or private property located within the district
 13-8    for purposes of inspecting and investigating conditions of the
 13-9    property relating to the district's authorized purposes.  The
13-10    district shall conduct an inspection or investigation in accordance
13-11    with provisions and restrictions applicable to the Texas Natural
13-12    Resource Conservation Commission.
13-13          SECTION 3.04.  HEARINGS AND ORDERS.  (a)  The board may:
13-14                (1)  hold hearings, receive evidence from a party in
13-15    interest who appears before the board, and make findings of fact
13-16    and determinations relating to the administration of this Act or an
13-17    order or rule of the board; and
13-18                (2)  delegate the authority to take testimony and
13-19    administer oaths in a hearing held by the district to a member of
13-20    the board or an employee of the district.
13-21          (b)  An order of the board must:
13-22                (1)  be in the name of the district; and
13-23                (2)  be attested to by the appropriate members of the
13-24    board under the district's rules.
13-25          SECTION 3.05.  CIVIL PENALTY; INJUNCTION.  (a)  A person who
13-26    violates a rule, permit, or order of the district is subject to a
13-27    civil penalty in accordance with Chapter 49, Water Code.
 14-1          (b)  The district may sue to enjoin a threatened or present
 14-2    activity or to recover the penalty in a district court in the
 14-3    county in which the violation occurred.  A penalty recovered under
 14-4    this subsection shall be paid to the district.
 14-5          SECTION 3.06.  FACILITIES.  In addition to the authority
 14-6    provided by Section 49.218, Water Code, the district may purchase,
 14-7    construct, acquire, own, lease, operate, maintain, repair, improve,
 14-8    and extend, at any location within or outside of the district,
 14-9    land, or an interest in land, a work, an improvement, a facility, a
14-10    plant, equipment, or an appliance that is incident, helpful, or
14-11    necessary to accomplish the purposes of the district.
14-12          SECTION 3.07.  USE OF PUBLIC ROADWAYS, STREETS, ALLEYS, OR
14-13    EASEMENTS. The district may use a public roadway, street, alley, or
14-14    easement in Fort Bend County to accomplish the purposes of the
14-15    district.  The district is not required to obtain a franchise or
14-16    other governmental agreement to use a roadway, street, alley, or
14-17    easement that is owned by a city if, before using the roadway,
14-18    street, alley, or easement, the district obtains written consent of
14-19    the city to the particular use. The district is not required to pay
14-20    a fee to a city for the use of the roadway, street, alley, or
14-21    easement.
14-22          SECTION 3.08.  RELOCATION OF FACILITIES.  The district may
14-23    relocate, raise, reroute, or change the grade of, or alter the
14-24    construction of, a highway, railroad, electric transmission line,
14-25    pipeline, canal, or drainage ditch, if considered necessary by the
14-26    board.  The district shall pay for any relocation, raising,
14-27    rerouting, changing, or altering under this section, unless
 15-1    otherwise agreed in writing by the interested parties.
 15-2                   ARTICLE 4.  GENERAL FISCAL PROVISIONS
 15-3          SECTION 4.01.  DISBURSEMENT OF MONEY.  The district may
 15-4    disburse money only by check, draft, order, or other instrument
 15-5    signed by a person authorized in the bylaws of the district or by
 15-6    board resolution.
 15-7          SECTION 4.02.  LOANS AND GRANTS.  The district may apply for
 15-8    and receive a loan or grant from the state or the United States, or
 15-9    any agency of the state or the United States, or from a private
15-10    entity, for purposes of exercising the powers of the district.
15-11          SECTION 4.03.  DEPOSITORY BANKS. (a)  A bank is not
15-12    disqualified from being a depository under this section because an
15-13    officer or a director of the bank is a member of the board.
15-14          (b)  An officer or a director of a bank is not disqualified
15-15    from being a member of the board.
15-16          (c)  Subject to Sections 49.156 and 49.157, Water Code, the
15-17    board may designate a bank as depository on terms that the board
15-18    finds proper.
15-19                    ARTICLE 5.  BOND AND TAX PROVISIONS
15-20          SECTION 5.01.  TAXES; REVENUE BONDS.  (a)  For purposes of
15-21    exercising the authority of the district as provided by this Act,
15-22    the district may issue bonds or other obligations that are:
15-23                (1)  secured by ad valorem taxes;
15-24                (2)  secured by a pledge of all or part of the revenues
15-25    accruing to the district, other than ad valorem taxes; and
15-26                (3)  secured by both a pledge of all or part of the
15-27    revenues described by Subdivision (2) of this subsection and ad
 16-1    valorem taxes.
 16-2          (b)  An obligation issued by the district shall be authorized
 16-3    by resolution of the board, issued in the name of the district,
 16-4    signed by the president or vice president, attested to by the
 16-5    secretary, and bear the seal of the district.  The signatures of
 16-6    the president or vice president and the secretary may be printed or
 16-7    lithographed on the obligation.  The seal of the district may be
 16-8    impressed, printed, or lithographed on the obligation.  An
 16-9    obligation issued by the district:
16-10                (1)  shall be in a form prescribed by the board;
16-11                (2)  may be in any denomination;
16-12                (3)  shall mature serially or otherwise not later than
16-13    50 years from the date of issuance;
16-14                (4)  may bear any interest rate;
16-15                (5)  may be sold at a price and under terms determined
16-16    by the board to be the most advantageous available;
16-17                (6)  may, in the discretion of the board, be made
16-18    callable before maturity at times and prices as provided in the
16-19    obligation;
16-20                (7)  may be made registrable as to principal or
16-21    principal and interest; and
16-22                (8)  may be secured by an indenture of trust with a
16-23    corporate trustee.
16-24          (c)  An obligation under this section may be issued in more
16-25    than one series as required to carry out the purposes of this Act.
16-26    A pledge of revenue may reserve the right to issue additional
16-27    obligations under conditions specified on the pledge.  An
 17-1    additional obligation is on a parity with or subordinate to the
 17-2    original obligation.
 17-3          (d)  The district is an issuer for purposes of Chapter 137,
 17-4    Government Code.
 17-5          (e)  A board resolution authorizing an obligation or a trust
 17-6    indenture under this section may include additional terms to
 17-7    provide for a corporate trustee or receiver to take possession of
 17-8    facilities of the district in the event of default by the district
 17-9    relating to the obligation or trust indenture.  The additional
17-10    terms, if any, constitute a contract between the district and the
17-11    owner of the obligation.
17-12          (f)  The district may not issue bonds that are secured by or
17-13    otherwise encumber permanent school fund land located within the
17-14    district.
17-15          SECTION 5.02.  BOND ANTICIPATION NOTES.  The district may
17-16    issue bond anticipation notes for purposes of exercising the powers
17-17    of the district.  Bond anticipation notes may be secured by a
17-18    pledge of all or part of the revenues of the district.  The
17-19    district may authorize the issuance of bonds to pay the principal
17-20    of and interest on bond anticipation notes issued under this
17-21    section.  Bond anticipation notes shall be secured by a pledge of
17-22    all or part of the revenues of the district and may be issued on a
17-23    parity with or subordinate to outstanding bonds of the issuer.  If
17-24    the resolution or trust agreement authorizing the issuance of bond
17-25    anticipation notes contains a covenant that the notes are payable
17-26    from the proceeds of subsequently issued bonds, the district is not
17-27    required to demonstrate that the revenues that may be pledged to
 18-1    the notes are sufficient to pay the principal of and interest on
 18-2    the notes for purposes of receiving approval of the attorney
 18-3    general or registration by the comptroller.
 18-4          SECTION 5.03.  REFUNDING BONDS.  (a)  The district may issue
 18-5    refunding bonds to refund outstanding bonds and interest as
 18-6    authorized by this Act.
 18-7          (b)  Refunding bonds may:
 18-8                (1)  be issued to refund one or more series of
 18-9    outstanding bonds;
18-10                (2)  combine the pledges for the outstanding bonds for
18-11    the security of the refunding bonds; or
18-12                (3)  be secured by additional revenues.
18-13          (c)  Refunding bonds may be issued without holding an
18-14    election to authorize the issuance of the bonds.
18-15          (d)  Refunding bonds shall be registered by the comptroller
18-16    on surrender and cancellation of the bonds to be refunded or, if
18-17    the resolution authorizing the issuance of refunding bonds provides
18-18    that the bonds shall be sold and the proceeds deposited in the bank
18-19    where the bonds to be refunded are payable, the refunding bonds may
18-20    be issued in an amount sufficient to pay the principal and interest
18-21    of the bonds to be refunded to their option or maturity date.  The
18-22    comptroller shall register the refunding bonds without concurrent
18-23    surrender and cancellation of the bonds to be refunded.
18-24                   ARTICLE 6.  MISCELLANEOUS PROVISIONS
18-25          SECTION 6.01.  TAX EXEMPTION.  The purposes stated in this
18-26    Act are for the benefit of the people of the state, including the
18-27    improvement of property and industry.  The district, in carrying
 19-1    out the purposes of this Act, is performing an essential public
 19-2    function under the constitution and is not required to pay a tax or
 19-3    assessment on a project of the district or on the bonds or notes
 19-4    issued by the district under this Act, including the transfer of,
 19-5    the income from, and the profits made on the sale of issued bonds
 19-6    and notes.
 19-7          SECTION 6.02.  FINDINGS RELATING TO PROCEDURAL REQUIREMENTS.
 19-8    (a)  The proper and legal notice of the intention to introduce this
 19-9    Act, setting forth the general substance of this Act, has been
19-10    published as provided by law, and the notice and a copy of this Act
19-11    have been furnished to all persons, agencies, officials, or
19-12    entities to which they are required to be furnished by the
19-13    constitution and other laws of this state, including the governor,
19-14    who has submitted the notice and Act to the Texas Natural Resource
19-15    Conservation Commission.
19-16          (b)  The Texas Natural Resource Conservation Commission has
19-17    filed its recommendations relating to this Act with the governor,
19-18    lieutenant governor, and speaker of the house of representatives
19-19    within the required time.
19-20          (c)  All requirements of the constitution and laws of this
19-21    state and the rules and procedures of the legislature with respect
19-22    to the notice, introduction, and passage of this Act are fulfilled
19-23    and accomplished.
19-24          SECTION 6.03.  EFFECTIVE DATE. This Act takes effect
19-25    immediately if it receives a vote of two-thirds of all the members
19-26    elected to each house, as provided by Section 39, Article III,
19-27    Texas Constitution.  If this Act does not receive the vote
 20-1    necessary for immediate effect, this Act takes effect September 1,
 20-2    2001.