(1) In addition to formation under ORS § 198.705 to 198.955, a joint water and sanitary authority may also be formed by consolidation of a water authority and a sanitary authority as provided by ORS § 450.610 to 450.630 if the consolidation is approved by the electors or if it is approved by a local government boundary commission as provided by ORS § 199.480 (1)(c). The authorities included in the consolidation shall be considered joined into a single new joint authority.

(2) If the consolidation is approved, the authority boards and officers of the consolidating authorities shall turn over to the board of the successor authority all funds, property, contracts and records of the consolidating authorities. Upon the effective date of the consolidation, the successor joint authority shall:

(a) Succeed to all the property, contracts, rights and powers of the consolidating authorities, and shall constitute and be a regularly organized authority as if originally organized in the manner provided by ORS § 198.705 to 198.955;

(b) Have the right to receive uncollected taxes, assessments or charges levied by the consolidating authorities and upon collection to credit the taxes, assessments or charges to the account of the successor joint authority; and

(c) Subject to any debt distribution plan adopted under ORS § 450.615, become liable for all the obligations, legal or contractual, of the consolidating authorities. [1993 c.577 § 2]