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2005 Texas Water Code CHAPTER 19. TEXAS DEEPWATER PORT AUTHORITY
WATER CODE CHAPTER 19. TEXAS DEEPWATER PORT AUTHORITY SUBCHAPTER A. GENERAL PROVISIONS § 19.001. POLICY. It is the policy, intent, and determination of the legislature that: (1) Texas urgently needs an offshore deepwater port capable of accommodating supertankers for the importation of crude oil and other fluid commodities that may be carried in ships of that size; (2) it is most desirable for private enterprise to own, construct, and operate such an offshore port; (3) in the absence of any active and viable plan to develop a deepwater, offshore port by private enterprise, the State of Texas should construct such a facility, which should be self-supporting and whose design, construction, and operation should be carried out by private companies under contract; (4) protecting the environment is essential to the proper operation of such a port; (5) the credit of the State of Texas shall not be pledged to finance such a port; and (6) the Texas Deepwater Port Authority be created to implement this policy. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.002. DEFINITIONS. In this chapter: (1) "General manager" means the General Manager of the Texas Deepwater Port Authority. (2) "Authority" means the Texas Deepwater Port Authority. (3) "Board" means the Board of Commissioners of the Texas Deepwater Port Authority. (4) "Commissioner" means a member of the Board of Commissioners of the Texas Deepwater Port Authority. (5) "Deepwater port" means the facilities defined in Section 3(10) of the Deepwater Port Act of 1974, 33 U.S.C.A. 1501 et seq., and also includes the onshore storage tank facilities and the pipelines located within the State of Texas that connect the onshore storage facilities with the offshore facilities of a deepwater port. (6) "Petroleum" means petroleum, crude oil, natural gas, and any substance refined from crude oil or natural gas. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.003. AUTHORIZATION FOR DEEPWATER PORT. In order to insure that the policy stated in this chapter is not circumvented, the Texas Deepwater Port Authority created by this chapter shall not commence operations unless and until the governor determines, and so states by executive order, that no active and viable plan to develop a deepwater, offshore port by private enterprise exists in Texas and that the Texas Deepwater Port Authority should carry out its responsibilities under this chapter. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.004. EXPIRATION. If the governor has not made the finding and issued the executive order provided in Section 19.003 of this code, all provisions of this chapter, including the existence of the Texas Deepwater Port Authority, shall expire on January 1, 1979. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.005. TIDELANDS. None of the provisions of this chapter shall be interpreted or construed to affect Texas's claim to its tidelands or the location of Texas's coastline as interpreted by the State of Texas. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977.SUBCHAPTER B. ADMINISTRATIVE PROVISIONS § 19.011. TEXAS DEEPWATER PORT AUTHORITY. The Texas Deepwater Port Authority is created as an agency of the state and pursuant to Article XVI, Section 59, Subsection (a) of the Texas Constitution. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.012. COMMISSIONERS; APPOINTMENT. The authority shall be governed by a board of commissioners with nine members, who shall be appointed by the governor with the advice and consent of the senate. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.013. TERMS OF OFFICE; VACANCIES. (a) Of the initial appointees to the board, the governor shall designate three persons to serve until January 31, 1979, three persons to serve until January 31, 1981, and three persons to serve until January 31, 1983. (b) Except for the initial appointees, each commissioner shall hold office for a staggered term of six years and until his successor is appointed and has qualified. (c) Any vacancy that occurs on the board shall be filled for the unexpired term in the manner provided in Section 19.012 of this code for making the original appointment. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.014. OFFICERS. (a) Before June 1 of each even-numbered year, the board of commissioners shall elect a chairman, except for the initial election of chairman which shall be made as soon as possible after the effective date of this chapter. (b) The board may elect other officers at the times and by the means as it may provide by rule. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.015. BOARD MEETINGS. (a) The board shall meet at least once every three months and may hold other meetings at the call of the chair or of five of the commissioners. (b) The board shall provide by rule for the conduct of meetings. (c) A majority of the commissioners shall constitute a quorum for the transaction of business. (d) All meetings of the board shall be open to the public to the same extent as may be provided by general law for meetings of state boards and agencies. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.016. COMPENSATION AND EXPENSES. Each commissioner is entitled to receive reimbursement for travel and other necessary expenses resulting from the performance of his duties under this chapter and is entitled to receive as compensation $75 a day for each day actually engaged in the work of the authority. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.017. POWERS AND DUTIES OF THE BOARD; DELEGATION. (a) The board shall formulate general policy to govern the authority and its activities. (b) The board shall exercise the powers and duties of the authority and may delegate to the agents and employees of the authority such powers and duties as the board may provide. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.018. GENERAL MANAGER. (a) The board shall employ a general manager to serve at the pleasure of the board. (b) The general manager shall be the chief administrative officer of the authority and shall manage the executive and administrative functions of the authority under policies adopted by the board. (c) The general manager shall have kept full and accurate minutes of all transactions and proceedings of the authority. (d) The general manager shall have any other duties the board may direct. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.019. EMPLOYEES; COMPENSATION; ETC. (a) The general manager shall employ necessary attorneys, accountants, engineers, technical personnel, and other employees as the board may consider necessary. (b) In employing persons under Subsection (a) of this section, the general manager shall comply with all federal laws and rules relating to equal employment opportunity and shall employ for each position the best qualified person for that position. (c) The employees of the authority shall receive the compensation provided by the board. (d) Employees of the authority shall not be considered employees of the State of Texas. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.020. RULES. The board shall, after proper notice and hearings, adopt rules governing the conduct of authority operations and the manner of carrying out its powers, duties, and responsibilities. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.021. DOCUMENTS, ETC.; OPEN FOR INSPECTION. (a) All information, documents, and data collected by the authority in the performance of its duties are open to inspection by any person to the same extent as if that information or the documents or data were the property of the state. (b) The general manager shall be the custodian of all the files and records of the authority. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977.SUBCHAPTER C. INITIAL ACTIVITIES AND STUDIES § 19.036. SECURING OF LICENSE. (a) Prior to the acquisition of any facilities, the sale of any bonds or notes, or the borrowing of any money, the authority shall secure all necessary licenses and permits for the acquisition, construction, and operation of a deepwater port facility. (b) No license or permit may be requested or accepted by the authority nor may the state be a party to a license or permit which would impose on the State of Texas or the authority any liability or financial obligation by virtue of contract, tort, or otherwise unless that liability or financial obligation is fully indemnified without expense of state funds. (c) With the exception of the initial appropriations from the General Revenue Fund to the Texas Deepwater Port Authority and revenues of the authority, the state may not pledge its faith and credit or contribute any state funds to a project of the Texas Deepwater Port Authority or for expenses of carrying out the powers and duties of the authority. Bonds issued under the provisions of this chapter shall not be deemed to constitute a debt of the state or a pledge of the faith and credit of the state. The authority is not authorized to incur any liability or financial obligations which cannot be serviced from the revenues of the authority or from the initial appropriations. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. Amended by Acts 1979, 66th Leg., p. 29, ch. 19, § 1, eff. March 3, 1979. § 19.037. ENGINEERING AND ENVIRONMENTAL STUDIES. Concurrent with any applications for licenses and permits for the construction and operation of a deepwater port facility, the authority shall conduct or cause to be conducted engineering and environmental impact studies to determine engineering feasibility of the proposed facility and to determine that adverse effects on the environment will be minimized. The authority may receive information concerning engineering and environmental impact data from any person, firm, or corporation possessing that information and, if construction of such deepwater port facility is commenced, may compensate that person, firm, or corporation a reasonable amount for the information, as determined by the authority. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.038. FINANCIAL FEASIBILITY. After securing all necessary licenses and permits to enable the acquisition, construction, and operation of a deepwater port facility, the authority shall conduct a study to determine the financial feasibility of constructing and operating a deepwater port facility. In addition to any financial details or other matters it deems relevant, the authority shall specifically investigate financing alternatives and determine which alternative is feasible and most attractive to the state. In no event does the authority have the ability to pledge the general credit of the state. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.039. FINAL REPORT OF COMMISSION; SUBMISSION OF REPORT TO GOVERNOR. After consideration of the studies required by Sections 19.036 through 19.038 of this code, the authority shall determine whether or not the facility is feasible and in the public interest and shall submit a detailed report of its findings to the governor and the legislature. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.040. SUBMISSION TO NATURAL RESOURCES COUNCIL. On receiving the report containing the findings of the authority, the governor shall transmit a copy of the report to the Natural Resources Council. The Natural Resources Council shall review the report of the authority and submit a recommendation to the governor on the report. If the council has objections to any part of the report, it shall state those objections in detail in its recommendation to the governor. If the council fails to act within 60 days after the report of the authority is received from the governor, the report is deemed approved by the council. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.041. ACTION BY THE GOVERNOR. The governor shall, within 120 days after the report of the authority is received, either approve or disapprove the findings of the authority. If the report is disapproved, the governor shall state in detail his reasons for disapproval of the report. If the governor disapproves the report of the authority, the authority may revise its report or undertake additional studies and submit a new report to meet the objections of the governor. If the governor has taken no action on the report within 120 days after submission, it is deemed approved. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.042. APPROVAL NECESSARY FOR CONSTRUCTION AND ISSUANCE OF BONDS. Prior to the acquisition of any property or construction of any facilities to be used as a part of a deepwater port facility, the sale of any bonds or notes, or the borrowing of any money, both the authority and the governor must find that the construction and operation of a deepwater port facility is feasible and in the public interest. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977.SUBCHAPTER D. POWERS AND DUTIES § 19.051. GENERAL POWERS AND DUTIES. (a) The authority has the powers and duties specifically prescribed by this chapter and all other powers necessary or convenient to carry out its responsibilities. (b) The authority shall have, in general, all the powers that are permitted to a corporation by the general laws of this state. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.052. SPECIFIC POWERS AND DUTIES. (a) In addition to its powers and duties under Section 19.051 of this code, the authority shall have the following specific powers and duties as to each individual deepwater port facility: (1) to acquire by purchase, lease, gift, or in any other manner other than by condemnation and to maintain, use, and operate property of any kind, real, personal, or mixed, or any interest in that property, within or without the boundaries of the State of Texas necessary or convenient to the exercise of the powers, rights, privileges, and functions conferred on it by this chapter; (2) to acquire by condemnation property of any kind, real, personal, or mixed, other than minerals or interests in minerals, or any interest in that property, within or without the boundaries of the State of Texas necessary or convenient to the exercise of the powers, rights, privileges, and functions conferred on it by this chapter, in the manner provided by Title 52 of the Revised Civil Statutes of Texas, 1925, as amended; (3) subject to the provisions of this chapter, from time to time to sell or otherwise dispose of any property of any kind, real, personal, or mixed, or any interest in that property that shall not be necessary to carry on the business of the authority; (4) subject to the limitations of Subsection (a) of Section 19.054 of this chapter, to construct, extend, improve, maintain, and reconstruct, to cause to be constructed, extended, improved, maintained, and reconstructed, and to use and operate, any and all facilities of any kind necessary or convenient to the exercise of such powers, rights, privileges, and functions; (5) to sue and be sued in its corporate name; (6) to adopt, use, and alter a corporate seal; (7) to make bylaws for the management and regulation of its affairs; (8) to make contracts and to execute instruments necessary or convenient to the exercise of the powers, rights, privileges, and functions conferred on it by this chapter; (9) to borrow money for its corporate purposes and without limitation of the generality of the foregoing, to borrow money and accept grants from the United States or from any corporation or agency created or designated by the United States, and in connection with any such loan or grant, to enter into agreements as the United States or the corporation or agency may require, and to make and issue its bonds and notes for money borrowed, in the manner and to the extent provided in Subchapter F of this chapter; (10) to apply for, request, solicit, contract for, receive, and accept money and other assistance from any source to carry out its duties; and (11) to do any and all other acts or things necessary or convenient to the exercise of the powers, rights, privileges, or functions conferred on it by this chapter or any other law. (b) If the authority requires the relocation, raising, lowering, rerouting, or change in grade or alteration in the construction of any railroad, electric transmission, telegraph or telephone lines, conduits, poles, or facilities, or pipelines in the exercise of the power of eminent domain, all of the relocation, raising, lowering, rerouting, or changes in grade or alteration of construction due to the exercise of the power of eminent domain shall be the sole expense of the authority. The term "sole expense" means the actual cost of relocation, raising, lowering, rerouting, or change in grade or alteration of construction to provide comparable replacement without enhancement of facilities, after deducting the net salvage value derived from the old facility. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.053. STATE-OWNED WATER BOTTOMS; LEASE; ETC. (a) The School Land Board shall lease to the authority state-owned water bottoms that are necessary for the construction, operation, and maintenance of a deepwater port. (b) The School Land Board shall not lease to any third party any water bottoms that may be necessary for construction, operation, or maintenance of a deepwater port unless the authority certifies to the School Land Board that those water bottoms are not required for use by the authority. (c) Necessary water bottoms shall be leased to the authority on the terms and for the compensation to which the School Land Board and the authority shall mutually agree. (d) Mineral rights and interests in the leased areas are reserved to the state; however, the School Land Board may not lease for mineral development any areas leased to the authority without the consent of the authority unless the mineral lease will not adversely affect the deepwater port. (e) The School Land Board, the authority, and the lessee may enter into agreements to coordinate the use of sites needed by the authority if the sites have existing mineral leases. (f) Nothing in this section shall authorize the authority to explore for, develop, or produce any minerals of whatever kind. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.054. DEVELOPMENT OF A DEEPWATER PORT. (a) The authority shall, as soon as possible after the effective date of this chapter: (1) have designed, licensed, developed, built, operated, maintained, or modified any deepwater port or ports as it shall determine to be necessary from time to time; (2) provide that the engineering, design, construction, operation, and maintenance of those deepwater ports shall be carried out by suitable private enterprise under the regulation and supervision of the authority; (3) finance those deepwater ports through self-supporting revenue bonds backed by tariffs charged the users of the facilities and by any other means that may be necessary or convenient and consistent with the provisions of this chapter; (4) enter into contracts with public or private entities necessary to carry out the provisions of this chapter, provided, however, that no contract for purposes of operation of a deepwater port may be entered into by the authority unless the contract stipulates that the public or private entities contracting with the authority shall assume any liability of the authority for any causes of action arising from environmental damage; (5) apply for any necessary licenses, permits, or other permissions necessary to carry out the provisions of this chapter; (6) set and collect those charges the authority may determine are appropriate for any service or other action performed by or requested of the authority; (7) take any actions the authority may determine are necessary or cause to be done any of the things required of the authority under this chapter; (8) enter into agreements with port and navigation districts and other political subdivisions or agencies of the state regarding matters of mutual concern; (9) make payments in lieu of taxes to the state and political subdivisions of the state to the same extent as if the property of the authority were privately owned, provided, however, that any payments in lieu of taxes shall be based on full value less the value of the interests of any public or private entities contracted with to operate the facility; and (10) take any other actions determined by the board to be necessary for the authority to carry out its duties and responsibilities in implementing the provisions of this chapter. (b) In addition to the foregoing, the authority may: (1) own, construct, maintain, lease as lessor or lessee, and sell by installment sale or otherwise, deepwater mooring facilities, wharves, sheds, pipelines, pumping stations, tanks, tank farms and facilities, heliports, warehouses, vessels, and other property, structures, equipment, and other facilities functionally related to a deepwater port; (2) dredge and maintain shipways, channels, anchorage, roadsteads, and fairways; (3) establish, operate, and maintain navigable waterway systems in the immediate area of the facilities constructed hereunder, in cooperation with the United States, this state, and political subdivisions of this state; (4) enter into a contract with any public or private entity to provide public utility service to the authority and its facilities, or provide its own utility services; (5) negotiate with and enter into contracts, compacts, and other agreements with the United States and other states of the United States concerning development programs including jurisdictional aspects of the location of deepwater ports and adoption and enforcement of rules governing authority operations; (6) adopt tolls, fees, rates, tariffs, and charges for use of the terminal or terminals or any of its facilities; (7) provide for use of existing port facilities and provide for rates, wharfage fees, and other matters of mutual interest, by agreements with existing port authorities and navigation districts; and (8) enter into contracts or agreements with any person, corporation, trust, or partnership for the financing, construction, operation, maintenance, and sale by installment or otherwise of a deepwater port or any facilities relative to a deepwater port. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.055. AUTHORITY CONTRACTS. (a) The authority may let any contracts for the purchase of materials, machinery, and equipment to constitute the plant, works, facilities, and improvements of a deepwater port, for construction, or for other purposes. (b) All these contracts shall be let to the lowest responsible bidder after sealed bids are solicited by public notice. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977.SUBCHAPTER E. ENVIRONMENTAL PROTECTION § 19.101. PROTECTION OF THE ENVIRONMENT. (a) The authority shall take all reasonable steps to protect the coastal environment and the high seas from any short-term or long-term damage or harm that might occur from any action the authority may take. (b) The general manager, under the direction of the board, shall formulate an environmental protection plan as soon as possible, which shall be adopted by the authority after proper notice and hearing. (c) In preparing and adopting the environmental protection plan, the authority shall consult and coordinate with any federal, state, and local agencies that have responsibility for environmental protection within the state and shall comply with applicable rules. (d) The environmental protection plan may be amended at any time by the authority after proper notice and hearing. (e) Environmental protection shall be a primary responsibility of the authority, and costs incurred to develop the plan to protect the environment shall be considered a necessary cost to the authority and shall be considered a cost to the same extent that economic, engineering, or promotional programs are considered costs. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977.SUBCHAPTER F. FINANCIAL PROVISIONS § 19.131. GENERAL PROVISIONS. The authority may: (1) borrow money from time to time for any corporate purpose or in aid of any corporate purpose; (2) issue and sell notes and provide the terms and conditions for repayment with interest and the rights of the holders of the notes; (3) issue and sell bonds and provide the terms and conditions for repayment with interest and the rights of the bondholders; (4) pledge, hypothecate, or otherwise encumber all or any designated part of the revenues and receipts of the authority as security for any of its notes or bonds; (5) invest money held in any sinking fund, reserve fund, or other fund or money not required for immediate use or disbursement in such securities as it shall determine; (6) apply for, accept, and administer grants, loans, and other assistance from the United States or any agency or instrumentality of the United States and any agency or instrumentality of this state to carry out the purpose of this chapter, and enter into any agreement in relation to those grants, loans, or other assistance as may be provided by the authority subject to the provisions of Section 19.036, which is not in conflict with the constitution of this state; and (7) fix, charge and alter, and collect reasonable rentals, rates, fees, and other charges for the use of any works and facilities or for any services rendered by the authority and provide for the imposition of reasonable penalties for any of those rates, fees, and charges that are delinquent. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.132. FORM AND TERMS OF BONDS AND NOTES. (a) Bonds and notes issued under the provisions of this chapter together with any interest coupons shall be authorized by resolution of the board and shall have the form and characteristics and bear the designation as are therein provided. (b) Bonds and notes shall: (1) be authorized by resolution or resolutions of the board; (2) bear the date or dates, mature at the time or times, serially, terms, or otherwise in not more than 50 years from their dates; and (3) be callable prior to stated maturity on the terms and at the prices, bear interest at such rate or rates, be payable annually, semiannually, or otherwise, be in the denominations, be in the form, either coupon or registered, carry the registration privileges as to principal only or as to both principal and interest and as to successive exchange of coupon for registered bonds or notes or vice versa and successive exchange of bonds or notes of one denomination for bonds or notes of other denominations, be executed in the manner, and be payable at the place or places within or without the state as the resolution or resolutions may provide. (c) Bonds or notes may be issued in one or more installments and from time to time as required and sold at a price or prices and under terms determined by the board to be the most advantageous reasonably obtainable. (d) The proceeds of the sale of bonds or notes shall be deposited in the bank or banks or trust company or trust companies and shall be paid out pursuant to the terms and conditions that may be agreed on between the authority and the purchasers. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.133. EXECUTION OF BONDS, NOTES, AND COUPONS. (a) Bonds or notes issued under the provisions of this chapter shall be signed by the chairman or vice-chairman of the board, be attested by its general manager, and bear the seal of the authority. (b) Any interest coupons appurtenant to the bonds or notes shall be signed by the chairman or the vice-chairman of the board and be attested by its general manager. (c) The resolution or resolutions authorizing the issuance of an installment or any series of bonds or notes may prescribe the extent to which the authority, in executing the bonds, notes, or appurtenant coupons, may use facsimile signatures and facsimile seals instead of manual signatures and manually impressed seals. (d) If an officer whose manual or facsimile signature appears on a bond or note or whose facsimile signature appears on any coupons ceases to be an officer before the bond or note is delivered, the signature is valid and sufficient for all purposes as if he had remained in office until the delivery had been made. (e) Neither the members of the board nor officers of the authority nor anyone executing the bonds or notes for and on behalf of the authority shall be liable personally on the bonds or notes of the authority by reason of participation in any way in the issuance of the bonds or notes. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.134. SECURITY PROVISIONS, ETC. (a) The bonds or notes may be secured by a pledge of all or any part of the revenues or receipts of the authority or by the revenues of any one or more leases or other contracts theretofore or thereafter made or other revenues or income specified by the resolution of the board or in the trust indenture or other instrument securing the bonds or notes. A pledge may reserve the right, under conditions specified in it, to issue additional bonds or notes that will be on a parity with or subordinate to the bonds or notes then being issued. (b) A pledge or security instrument made by the authority is valid and binding from the time when it is made. The revenues or money pledged and entrusted and thereafter received by the authority shall immediately be subject to the lien of the pledge or security instrument without any physical delivery of it or further act. The lien of the pledge or security instrument is valid and binding against all parties having claims of any kind in tort, contract, or otherwise against the authority, irrespective of whether the parties have notice thereof. Neither the resolution nor any security instrument or other instrument by which a pledge or security interest is created need be recorded or filed, and compliance with any provision of any other law is not required in order to perfect the pledge or other security interest. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.135. PROVISIONS OF RESOLUTION. A resolution authorizing bonds or notes or a trust indenture under which bonds or notes may be issued may contain provisions, which shall be a part of the agreement with the holders of bonds or notes, as to: (1) pledging all or any part of the rentals, rates, fees, and other charges made or received by the authority and other money received or to be received from the planning, financing, ownership, operation, or sale of or otherwise in connection with any project to secure the payment of the bonds or notes or of any issue of the bonds or notes; (2) pledging all or any part of the assets of the authority, including any obligation acquired by the authority, to secure the payment of the bonds or notes or any issue of the bonds or notes; (3) the use and disposition of rentals, rates, fees, and other charges made or received by the authority; (4) pledging to establish, alter, and collect rates and other charges with respect to each property or facility sufficient to produce revenues adequate to pay all expenses necessary to the operation and maintenance of such to be made in respect of any of those bonds or notes payable out of those revenues as the bonds or notes become due and payable, and to fulfill the terms of any agreement made with the holders of the bonds or notes and with any person in their behalf; (5) the setting aside of reserves or sinking funds and the regulation and disposition of those reserves and sinking funds; (6) limitations on the purpose to which the proceeds from the sale of the bonds may be applied and pledging the proceeds to secure the payment of the bonds, notes, or any issue of the notes or bonds; (7) limitations on the issuance of additional bonds and on the refunding of outstanding or other bonds or notes; (8) the acquisition, construction, improvement, operation, extension, enlargement, maintenance, and repair of any project and the duties of the authority with reference thereto; (9) the procedure, if any, by which the terms of any agreement with bondholders or noteholders may be amended or abrogated, the amount of bonds or notes the holders of which are required to give consent thereto, and the manner in which the consent may be given; (10) limitations on the amount of money to be spent by the authority for administrative or other expenses; (11) vesting in a trustee or other fiduciary, property, rights, powers, and duties in trust the authority determines, which may include any of the rights, powers, and duties of the trustee appointed by the bondholders or noteholders pursuant to this chapter, and abrogating the right of the bondholders or noteholders to appoint a trustee under this chapter or limiting the rights, powers, and duties of the trustee; (12) placing the management, operation, and control of specified works and facilities of the authority in the hands of a board of trustees to be named in the resolution or trust indenture and specifying the terms of office of the trustees, their powers and duties, the manner of exercising the same, the appointment of successors, and all matters pertaining to their organization and duties; and (13) any other matters, of like or different character, which in any way affect the security or protection of the bonds or notes or the bondholders or noteholders. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.136. DEFAULT PROVISIONS. The resolution authorizing the issuance of the bonds or notes or the trust indenture or other instrument securing them may provide that in the event of a default or, under the conditions therein stated, a threatened default in the payment of principal or of interest on bonds or notes, any court of competent jurisdiction may, on petition of the holders of outstanding bonds or notes, appoint a receiver with authority to collect and receive pledged income, and those instruments may limit or qualify the rights of less than all of the holders of the outstanding bonds or notes payable from the same source to institute or prosecute any litigation affecting the authority's properties or revenues. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.137. ADDITIONAL SECURITY. (a) Any bonds or notes, including refunding bonds, authorized by this chapter may be additionally secured by a trust indenture under which the trustee may be a bank having trust powers situated either within or without the state. (b) The bonds or notes, within the discretion of the board, may be additionally secured by a mortgage or a deed of trust lien or security interest on works and facilities of the authority and all real property, franchises, easements, leases, and contracts and all rights appurtenant to those properties, vesting in the trustee power to sell those works and facilities for the payment of the indebtedness and to operate those works and facilities, and all other powers and authority for the further security of the bonds or notes. (c) The trust indenture, regardless of the mortgage or the deed of trust lien or security interest in the properties, may contain any provisions prescribed by the authority for the security of the bonds or notes and the preservation of the trust estate, may make provision for amendment or modification thereof, may condition the right to spend the authority's money or sell the authority's works and facilities on approval of a registered professional engineer selected as provided in the trust indenture, and may make any other provisions for protecting and enforcing the rights and remedies of the bondholders or noteholders as may be reasonable and proper and not in violation of the law. The trust indenture may also contain provisions governing the issuance of bonds and notes to replace lost, stolen, or mutilated bonds or notes. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.138. BOND PROCEEDS. (a) The board may direct the investment of money in the funds created by the resolutions, trust indentures, or other instruments securing the bonds or notes. (b) From the proceeds from the sale of the bonds or notes, the board may set aside amounts for payments into the interest and sinking fund until completion of construction and until adequate revenue is available from operations to pay principal and interest and amounts for payments into reserve funds, and provisions for such may be made in the resolution authorizing the bonds, notes, or the trust indenture or other instrument securing the bonds or notes. (c) Proceeds from the sale of the bonds or notes shall be used for the payment of all expenses of issuing and selling the bonds or notes. (d) The proceeds from the sale of the bonds or notes and money in any funds created in connection with the bonds or notes may be invested in: (1) direct or indirect obligations of or obligations unconditionally guaranteed by the United States government or one of its agencies maturing in the manner that may be specified by the resolution authorizing the bonds or notes or the trust indenture or other instrument securing the bonds or notes; or (2) certificates of deposit of any bank or trust company whose deposits are secured by the obligations described in Subdivision (1) of this subsection. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.139. DEPOSITORY. Any bank or trust company located in this state and incorporated under the laws of the United States or any state in the United States may be designated by resolution to act as depository for the proceeds of bonds, notes, or contract or lease revenues or other revenues of the authority. The bank or trust company shall furnish indemnifying bonds or pledge securities to secure those deposits to the same extent as may be required by general law to secure the deposit of state funds. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.140. REFUNDING. (a) The board may provide by resolution for the issuance of refunding bonds or notes to refund outstanding bonds or notes issued under this chapter and their accrued interest. (b) The authority may sell these bonds or notes and use the proceeds to retire the outstanding bonds or notes issued under this chapter or the authority may exchange the refunding bonds or notes for the outstanding bonds or notes. (c) The issuance of the refunding bonds or notes, their maturity, the rights of the bondholders and the duties of the authority with respect to refunding bonds or notes are governed by the provisions of this chapter relating to original bonds or notes, to the extent that they may be made applicable. (d) The authority may also refund any bonds or notes under the provisions of general law. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.141. APPROVAL AND REGISTRATION OF BONDS AND NOTES. (a) After bonds and notes, including refunding bonds and notes, are authorized by the board, those bonds and notes and the record relating to their issuance shall be submitted to the attorney general for his examination as to their validity. (b) If the bonds and notes recite that they are secured by a pledge of the proceeds of any lease or other contract previously made between the authority and any person, those leases and contracts may also be submitted to the attorney general. (c) If those bonds or notes have been validly authorized and if those leases or contracts have been made in accordance with the constitution and laws of the state, the attorney general shall approve the bonds or notes, and the leases or contracts and the bonds or notes shall be registered by the state comptroller. (d) The attorney general in approving bonds or notes issued in anticipation of being refunded by other bonds and notes shall not require as a condition of his approval that those bonds or notes being examined have pledged to them sufficient revenues to retire the bonds and notes before the time they will be refunded in accordance with such anticipation. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.142. INCONTESTABILITY. After the bonds or notes, and the leases or other contracts, if any, have been approved by the attorney general, and the bonds and notes have been registered by the state comptroller and delivered to the purchasers, those bonds and notes and any underlying leases and contracts are incontestable for any cause. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.143. DUTIES ENFORCEABLE BY MANDAMUS. Payment of any bonds and notes according to the term and tenor, performance of agreements with the holders of bonds or notes or any person in their behalf, and performance of official duties prescribed by the provisions of this chapter in connection with any bonds or notes may be enforced in any court of competent jurisdiction by mandamus or other appropriate proceeding. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.144. BONDS NEGOTIABLE. Bonds issued under the provisions of this chapter and coupons, if any, representing interest on those bonds, shall, when delivered, be deemed and construed to be a "security" within the meaning of Chapter 8 of the Uniform Commercial Code, as amended. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.145. BONDS AND NOTES NOT TAXABLE. Bonds and notes issued under the provisions of this chapter, the interest on the bonds and notes, and the profit from the sale of the bonds and notes shall be exempt from taxation, except inheritance taxes, by the state or by any municipal corporation, county, or other political subdivision or taxing district of the state. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.146. AUTHORIZED INVESTMENTS. Bonds and notes issued under this chapter are legal and authorized investments for: (1) banks; (2) savings banks; (3) trust companies; (4) building and loan associations; (5) insurance companies; (6) fiduciaries; (7) trustees; and (8) sinking funds of the state of cities, towns, villages, counties, school districts, and all political corporations, subdivisions, and public agencies of the state. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.147. SECURITY FOR DEPOSIT OF FUNDS. Bonds and notes issued under the provisions of this chapter, when accompanied by all appurtenant unmatured coupons if any, are lawful and sufficient security for all deposits of funds of the state or of a city, town, village, county, school district, or any other agency or political corporation or subdivision of the state, at the par value of the bonds. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.148. SOURCE OF REPAYMENT. Bonds and notes issued under the provisions of this chapter together with the interest on the bonds and notes shall be secured by and payable solely from the revenues and receipts of the authority and other money available therefor, including, without limitation, rentals, rates, fees, and other charges made and received by the authority and other money received and to be received from grants and assistance, and other money received and to be received from the planning, financing, ownership, or operation of any works and facilities of the authority, and other money available therefor from proceeds of bonds or notes. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977. § 19.149. STATE CREDIT NOT PLEDGED. (a) The provisions of this chapter shall not be construed to authorize the giving or lending of the credit of the state or to be a pledge of the credit of the state for the payment of any bonds or notes issued under the provisions of this chapter, and the purchasers and successive holders of any bonds or notes shall never have the right to demand payment from any money or revenues of the authority except those pledged to the payment of bonds or notes. (b) This chapter shall not be construed as obligating this state to the holders of any of those bonds or notes nor to constitute a contract on the part of this state to make money available for any of the authority's needs. (c) This state, however, pledges and agrees to the holders of any bonds or notes issued under this chapter that it will not limit or alter the rights vested in the authority to fulfill the terms of any agreements made with the holders thereof consistent herewith, or in any way impair the rights and remedies of the holders until the bonds and notes, together with interest on them, with interest on any unpaid installments of interest, and all costs and expenses for which the authority is liable in connection with any action or proceedings by or on behalf of the holders, are fully met and discharged. The authority shall include this pledge and agreement of the state in any agreements it makes with the holders of the bonds or notes. Added by Acts 1977, 65th Leg., 1st C.S., p. 59, ch. 5, § 1, eff. July 26, 1977.
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