(a) A municipality, district, or river authority of this state may contract with another municipality, district, or river authority of this state to obtain or provide part or all of:
(1) water supply or wastewater treatment facilities; or
(2) a lease or operation of water supply facilities or wastewater treatment facilities.
(b) The contract may provide that the municipality, district, or river authority obtaining one of the services may not obtain those services from a source other than a contracting party, except as provided by the contract.

Terms Used In Texas Government Code 791.026

  • Contract: A legal written agreement that becomes binding when signed.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.

(c) If a contract includes a term described by Subsection (b), payments made under the contract are the paying party’s operating expenses for its water supply system, wastewater treatment facilities, or both.
(d) The contract may:
(1) contain terms and extend for any period on which the parties agree;
(2) require the purchaser to develop alternative or replacement supplies prior to the expiration date of the contract and may provide for enforcement of such terms by court order; and
(3) provide that it will continue in effect until bonds specified by the contract and any refunding bonds issued to pay those bonds are paid.
(e) Where a contract sets forth explicit expiration provisions, no continuation of the service obligation will be implied.
(f) Tax revenue may not be pledged to the payment of amounts agreed to be paid under the contract.
(g) The powers granted by this section prevail over a limitation contained in another law.

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