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CC Resolution No. 429 RESOLUTION NO. 429 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS , SUPPORTING THE GENERAL OIL AND GAS LEASE SALE OF 129 TRACTS OF SUBMERGED LAND ON THE OUTER CONTINENTAL SHELF IN THE GULF OF MEXICO. WHEREAS, State and local agencies have been requested to submit their views and comments on the possibility of oil and gas leasing of submerged lands in the Gulf of Mexico at a hearing scheduled by the Department of the Interior for Feb- ruary, 1973 in Houston, Texas; and WHEREAS, the City of Baytown, Harris County, Texas , is located in an area where intensive oil and gas production and refining have been conducted for many years and its citizens are well aware of and are familiar with similar operations which have been and are being conducted in the adjacent offshore area of the Gulf of Mexico; and WHEREAS, such operations when conducted in a responsible manner do not have a detrimental effect on the total environment, aesthetics, recreation and other uses of the land and waters concerned; and WHEREAS, oil and gas production and refining have been of great economic benefit to this community and the surrounding area, and the resumption of oil and gas leasing of submerged lands in the Gulf of Mexico is not only essential for the City of Baytown, but for the security, happiness and comfort of the entire Nation; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN , TEXAS: Section 1 : That the Mayor and City Council of the City of Baytown, Texas, express to the Department of the Interior through the medium of this Resolution its favorable view toward the resumption of offshore leasing and particularly with respect to the tracts under consideration at the February, 1973, hearing. Section 2: This Resolution shall take effect immediately from and after its passage by the City Council of the City of Baytown. q INTRODUCED, READ and PASSED by the affirmative vote of the City Council this 8th day of February, 1973. C. GLEN WALKER, Mayor ATTEST: II Z ' a�� EDNA OLIVER, City Clerk APPROVED: '7014 e 944400/ EL RICHA DSON, City Attorney -2- EXHIBIT I i I i 1 i 1 1 i i i 1 H. B. NO. By A BILL TO BE ENTITLED An Act creating and establishing a conservation and reclamation district under and essential to the purposes of Article XVI, Section 59 , Constitution of Texas , to be known as "Baytown Area Water Authority"; declaring the Authority a governmental agency, body politic and corporate; defining the boundaries and finding that the boundaries of the Au- thority forma closure; finding that all property to be served by the Authority will be benefited thereby;. con- ferring rights , powers, privileges , authorities and func- tions upon the Authority; providing for the power 'to con- tract and making provision for such contracts; providing for the acquisition of water rights; providing that no confirmation election is necessary; providing for a hear- ing on exclusions; providing for addition .or annexation of land; providing that the Authority shall not have the right, power or authority to impose, levy, assess or col- lect taxes; providing that enactment shall not prevent the organization of conservation and reclamation districts within the boundaries of the Authority or the changing of the boundaries of such districts; providing for the appoint- ment, election and powers of a Board of Directors, the em- ployment of a General Manager, and other related matters; providing for the power to borrow money, issue bonds, in- vest surplus funds and related matters ; providing for the power to construct, lay and maintain canals and certain other facilities for transportation and distribution of water, together with other incidental facilities; providing for the power of eminent domain and for the Authority's bearing the expense of relocation of certain properties and facilities; providing that the Authority not be re- quired to give bond for costs in lawsuits; providing for the appointment of depositories and a system of accounts and an audit thereof; providing for offices of the Autho- rity; providing that the bonds of the Authority are eligible investments and securities; finding that .the requirements of Article XVI, Section 59 (d) of the Constitution have been accomplished;. finding that the Authority will be carrying out an essential public function; enacting other provisions related to the aforementioned matters; providing a severa- bility clause; and declaring an emergency. Be it enacted by the Legislature- of the State of Texas : Sec. 1 . Under and- pursuant to the provisions of - J Article XVI, Section 59 , Constitution. -of Texas , a conservation and reclamation district is hereby created and established in Harris County, Texas, to be known as "Baytown Area Water Authority" (hereinafter called the "Authority") which shall be a governmental agency and a body politic and corporate. ' The creation and establishment of the Authority is hereby de- clared to be essential to the accomplishment of the purposes of Article XVI, Section 59 , Constitution of Texas. Sec. 2. It is determined and found that the .bound- aries and field notes of the Authority form aclosure; and if any mistake is made in copying the field notes in the legis- lative process ,- or otherwise a mistake is made in the field notes, 'it shall in no way affect the organization, existence and validity of the Authority, or the right of the Authority to issue revenue bonds or revenue refunding bonds for the pur- poses for which the Authority is created, or to pay the princi- pal and interest thereon, or in any other manner affect the legality or operation of the Authority or its governing body. 2. Sec. 3. It is determined and found that all of the land and other property included within the area and boundaries of the Authority and lands and properties which may feasibly be served by the Authority will be benefited by the works and project which are to be accomplished by the Authority pursuant to the powers conferred by the provisions of Article XVI , Sec- tion 59 , Constitution of Texas ; and that said Authority was and is created to serve a public use and benefit. Sec. 4. The Authority shall comprise all of the territory contained within the following described area: BEGINNING at a point on the South right-of-way line of Interstate Highway No. 10, said point being at the intersection of the Easterly shoreline of the San Jacinto River; THENCE, in a Southerly direction following the Easterly shoreline of the San Jacinto River to a point of intersection with a line which is parallel to and 2500 feet from the centerline of the Houston -Ship Channel ; THENCE, in a Southeasterly direction along the line which is parallel to and 2500 feet from the centerline of the Houston ship Channel to a point of intersection with the Vest shoreline of Burnett Bay; THENCE, in a Northeasterly direction along the shoreline of Burnett Bay, -and continuing along the shoreline of Burnett Bay to its juncture with the shoreline of Crystal Bay, and continuing along the shoreline of Cry- stal Bay to its juncture with the shoreline of Scott Bay, and continuing '^ along the.shoreline of Scott Bay to a point of intersection with a line which is parallel to and 2500 feet from the centerline of the Houston Ship Channel ; 3. THENCE, in a Southeasterly direction along the line which is parallel to and 2500 feat from the centerline of the Houston Ship Channel - to a point of intersection with the shoreline of Black Duck Bay; THENCE, in an Easterly direction along the shoreline of Black Duck Bay,, and continuing alonq the shoreline of Black Duck Bay to the mouth of Goose Creek, and continuing across the mouth of Goose Creek to the shoreline of Tabbs Bay, and then continuing along the shoreline of Tabbs Bay to a point of intersection with the West line of Cedar Bayou; THENCE, in a iNortherly direction along the :lest line of Cedar Bayou to a point of intersection with the North right-of-way line of State Farm-Market Highway No. 2354; WHENCE, in a Southeasterly direction, crossing Cedar Bayou along the North- easterly riche-of-way line of State Farm-Market Highway No. 2354, and con- tinuinq along the Northerly right-of-way line of State Farm-Market High-uay . No. 2354 nearly seven miles to a point approximately .315 feet Southwest of a 5/8 inch iron rod having a Texas plane Coordinate value of x=3,315,954.08, y=710,156.88; i THENCE, North 74 degrees 10 minutes 00 seconds West a distance of•532.84 feet to a point marked by a 5/8 inch iron rod; THENCE, North 15 degrees, 50 minutes 00 seconds East a distance of 299.96 feet to a point marked by a 5/8 inch iron rod; I THENCE, South 74 degrees 10 minutes 00 seconds East a distance of 629.00 feet to a point marked by a 5/8 inch iron rod, said point being on the Westerly right-of-way line of State Farm-Market Highway No. 2354 and said Iron rod having a Texas plane coordinate value of x=3,315,954.08, y=710,156.•88; - THENCE, continuing in a Northerly direction along the Westerly right-of-way line of State Farm-Market Highway No. 2354 and its extension across State Farm- Market Highway No. 565 to a point of intersection with the South right-of-way • line of Interstate Highway No. 10; THENCE, in a Westerly direction alongthe South right-of-way line g y of Inter- state Highway No. 10 to a point of intersection with the Easterly shoreline of the San Jacinto River, said point of intersection being the POINT OF BE- GINNING. Sec. 5. A. The Authority is hereby vested with, and shall have and exercise, all of the rights , powers , privileges , authorities and functions conferred by the general laws of this State applicable to municipal utility districts , including with- out limitation those conferred by Chapter 54, Title 4, Water Code, with all amendments and additions thereto, but if any pro- vision of such general laws shall be in conflict or inconsistent with the provisions of this Act, the provisions of this Act shall prevail. All such general laws applicable to municipal utility i 4 . 4 districts not in conflict or inconsistent with the provisions of this Act are hereby adopted and incorporated by reference with the same effect as if incorporated in full by this Act. The powers and functions conferred on the Authority are granted sub- ject to the policy of the State to encourage the development and use of integrated area-wide waste collection, treatment and dis- posal systems to serve the waste disposal needs of the citizens of the State, it being an objective of the policy to avoid the economic burden to the people and the impact on the quality of the waters in the State which result from the construction and operation of numerous small waste collection, treatment and disposal facilities to serve an area when an integrated area- wide waste collection, treatment and disposal system for the area can reasonably be provided. B. Not by way of limitation, the Authority shall have and is hereby expressly granted the following rights , powers , privileges and functions: (1) The right, power and authority to acquire surface and/or underground water supplies from sources both within and without the boundaries of the Authority and to conserve, store, transport, treat, purify, distribute, sell and de- liver water, both surface and underground, to persons , corporations (public or private) , municipal corporations , political subdivisions of the State of Texas, and others , both within and without the boundaries of the Authority; (2) The right, power and authority to collect and transport the domestic, industrial or communal wastes of the entities described in the preceding subsection, to in- elude, but not by way of limitation, the purposes of the Regional Waste Disposal Act (Chapter 25, Title 2, Water Code) ; 5. (3) The right, power and authority to make, purchase , construct, lease or otherwise acquire property, works , facilities and improvements (whether previously existing or to be made, constructed or acquired) , within or without the boundaries of the Authority, necessary to carry out the rights , powers and authority granted by this Act and the general laws; ' (4) The right, power and authority to enter into con- tracts of not exceeding forty (40) years duration with per- sons, corporations (public or private) , municipal corporations, including the City of Baytown, political subdivisions of the State of Texas, and others , on such terms and conditions as the Board of Directors of the Authority may deem desirable, fair and advantageous for the performance of its rights , powers and authorities under this Act; provided, that be- fore entering such. contracts, except those between the Authority and the City of Baytown, the Board of the Autho- rity shall secure the approval of the City Council of the City of Baytown; provided, that such contracts may provide that they shall continue in effect until bonds issued by the Authority to finance the cost of facilities authorized by this Act, and refunding bonds issued in lieu thereof, are paid; and further provided that Article 1109j , Vernon 's Texas Civil Statutes, as amended, shall specifically apply to any contract between the Authority and any city or town, including without limitation, the City of Baytown; and (5) The right, power and authority to enter into, con- tracts with others for transporting their water and to act jointly with others in the performance of all functions and purposes of the Authority; provided, that before entering such contracts , except those between the Authority and the City of Baytown, the Board of the Authority shall 6 . secure the approval of the City Council of the City of Baytown. C. No election shall be required of the Authority for approval of contracts with municipal corporation or other political subdivisions for services enumerated in this Act. Prior to entering contracts , however, elections must be held within such municipal corporations or political subdivisions contracting with the Authority to authorize entering into the contract; provided that no election shall be required each time the contract is amended. D. Nothing herein contained shall preclude the Autho- rity from acquiring water rights under any laws or permits here- tofore or hereafter issued, provided acquisition of the same is approved by order or subsequent permit from the Texas Water Rights Commission. ' Sec. 6 . It shall not be necessary for the Board of Directors to call or hold an election for the confirmation of the Authority. Sec. 7. It shall not be necessary for the Board of Directors to call or hold a hearing on the exclusions of land or other property from the Authority; provided, however, that the Board shall hold such hearing upon the written petition of any landowner or other property owner within the Authority filed with the secretary of the Board prior to the passage of the first order or resolution authorizing bonds to be issued by the Authority. The Board may act on said petition in the same manner that it may act on a petition for the addition of land under Sections 54.711-.715, Title 41 Water Code, and no notice of hearing shall be required other than notice of the meeting whereat such action is taken pursuant to Section 54 . 109 , Title 4 , Water Code. The Board on its own motion may call and hold an exclusions hearing or hearings ' in the manner provided by the general law. 7. Sec. 8. Land may be added or annexed to the Authority in the manner now provided by Chapter 54 , Title 4 , Water Code, and without. the consent of any city as provided in Article 970a, Vernon's Texas Civil Statutes, as amended, either before or after revenue bonds of the Authority have been issue, and no such boundary change shall have any effect upon the validity of any bonds of the Authority. Sec. 9 . A. The Authority shall have no right, power or authority to impose, levy, assess or collect taxes on any property, real, personal or mixed, nor shall the Authority have the right, power or authority to issue bonds or create indebtedness which would be payable directly from ad valorem taxes levied by the Authority. B. The enactment of this law shall not have the effect of preventing the organization of conservation and reclamation districts or of preventing boundary changes of such districts within the boundaries of the Authority as authorized in Article XVI,. Section 59 and Article III, Section 52 of the Constitution of Texas. To encourage the State policy referred to in Sec. 5 (A) hereof and to prevent wasteful duplication, all conservation and reclamation districts created in the future within the boundaries of the Authority shall, however, contract with the Authority for the provision of facilities and services that the Authority is empowered to provide under this Act whenever the Authority has or in its determination can provide such facilities and services. Sec. 10 . A. All powers of the Authority shall be ex- ercised by a Board of five Directors, none of whom shall be a member of the City Council of the City of Baytown during his term as director. By September 1 , 1973, the City Council of the City of Baytown shall assign position numbers to each di- rector's office and shall appoint directors to such positions 8. for two-year terms as follows : those directors occupying Posi- tions Number 1 and Number 2 shall serve until September 1 , 1974 , and thereafter until a successor has been appointed and quali- fied; those directors occupying Positions Number 3 , Number - 4 and Number 5 shall serve until September 1 , 1975, and there- after until a successor has been appointed and qualified. Upon the expiration of such terms the City Council of the City of Baytown shall fill such positions by appointment of a director to each position for a term of two years, so that two directors shall be so appointed in one year and three directors in the next year in continuing sequence. Vacancies in the office of director, because of the failure or refusal of one or more directors to qualify or serve, because of death or incapacitation, or for any other reason, shall be filled by appointment of the City Council of the City of Baytown for the unexpired term. Each director shall serve without emolument or compensation paid by the Autho- rity. B. Each director shall qualify by subscribing to the con- stitutional oath of office and giving bond in the amount of $5,000 for the faithful performance of his duties. The cost of such bond shall be paid by the Authority. Such bond of the first directors shall be approved by the Mayor of the City of Baytown and filed in the office of the City Manager of the City of Baytown, Texas . The bonds of directors appointed after the first directors shall be approved by the Authority's Board of Directors and shall be recorded in a record kept for that purpose in the office of the Authority. C. At the first meeting in September of each year, or after the annual vacancies in the Board of Directors are filled as provided herein and such directors are qualified, the Board shall elect a president, a vice president, a secretary and any other officers as in the judgment of the Board are - considered necessary. The vice president shall perform all 9 . duties and exercise all power conferred by this Act or the provisions of the general law upon the president when the president is absent or fails or declines to act. Any order adopted or other action taken at a meeting of the Board at . which the president is absent may be signed by the vice presi- dent, or the Board may authorize the president to sign such order or other action. D. At the direction of the Board of Directors , the General Manager of the Authority, as hereinafter provided, may execute all contracts, construction or otherwise, entered into by the Board on behalf of the Authority. E. A majority of the duly qualified directors shall con- stitute a quorum of any meeting of the Board of Directors, and a concurrence of a majority of those directors present and vot- ing shall be sufficient in all matters pertaining to the busi- ness of the Authority, including the letting of construction work•, purchase of existing facilities , and matters relating to the construction work. Sec. 11 . A. The City Manager of the City of Baytown shall be the General Manager of the Authority for so long as the City of Baytown has such an officer. If the position of City Manager is ever abolished, the chief executive officer of the City of Baytown or his designee shall serve as General Manager. The General Manager shall serve without emolument or compensation paid by the Board. B. The General Manager is the chief executive officer of the Authority. Under policies established by the Board, he is responsible to the Board of Directors for the following duties : (1 ) administering the directives of the Board; (2) keeping the Authority's records, including minutes of the Board's meetings; (3) coordinating with State, federal and local agencies; (4) developing plans and programs for the Board 's approval; 10 . (5) formulating a budget for the Authority's fiscal year, as hereinafter provided, subject to the approval of both the Board and the City Council of the City of Baytown; (6) hiring, supervising, training and discharging the Authority's employees; (7) contracting for or retaining technical, scien- tific, legal, fiscal and other professional services; and (8) performing any other duties assigned to him by the Board. C. The General Manager and each employee of the Authority charged with the collection, custody or payment of any money of the Authority shall execute a fidelity bond, ap- proved by the Board of Directors as to form, amount and surety. The Authority shall pay the premiums on the General Manager's and the employees ' bonds under this section. D. Pursuant to the provisions of The Interlocal Cooperation Act, Article 4413 (32c) , Vernon' s Texas Civil Statutes , as amended, the Authority shall offer to enter into an interlocal contract or agreement with. the City of Baytown for the performance of administrative functions, as defined therein. Sec. 12 . A. The Authority is authorized to: (1 ) reimburse the City of Baytown for all reason- able expenses incurred in connection with the creation and establishment of the Authority, including publication costs , legal fees and charges for the services of other consultants and other incidental costs; (2) with the prior approval of the City Council of the City of Baytown, borrow money from time to time for the purpose of carrying out any of the powers granted to the (0111, Authority by.: 11 . (a) issuing and selling negotiable or non- negotiable notes and providing the terms and conditions of these notes and the rights of the holders of these notes payable from and secured by the sources described in this Act; (b) issuing and selling revenue bonds with- out the necessity of an election and providing the terms and conditions of these bonds and the rights of the holders of these bonds payable from and secured by the sources described in this Act; and (c) delivering such notes and bonds to the United States , or any agency or instrumentality there- of, or to the State of Texas, or any agency or instru- mentality thereof, when it is determined by the Board of Directors to be in the best interest to the Authority. (3) invest any money held in any sinking fund, re- serve fund, or other fund or any money not required for immediate use or disbursement in the securities as provided in this Act; (4) apply for, accept and administer grants ; loans and other assistance from the United States and any agency or instrumentality of this State or any other state to carry out the purpose of this Act, and to enter into any agreement in relation to these grants, loans or other assistance as may be provided by the Authority which is not in conflict with the constitution of this State; and (5) fix, charge, alter and collect reasonable rentals , rates, fees and other charges for the use of any facilities or for any services rendered by the Authority and provide for the imposition of reasonable penalties for any of these rentals , rates , fees and charges that are delin- quent, and further to comply with its mandatory duty to fix, charge, alter and collect the rentals, rates, fees and charges 12 . which are sufficient to produce revenues adequate to fulfill any agreement with the holders of bonds or notes issued under the provisions of this Act. B. All bonds and notes of the Authority shall be authorized by resolution or resolutions of the Board, con- curred in by at least a majority of such Board members and further approved by the City Council of the City of Baytown prior to issuance thereof. Such bonds and notes shall have the form, characteristics and bear the designation; bear the date or dates; mature at such time or times, serially, term or other- wise, in not more than forty (40) years from their dates; bear interest at the rate or rates, payable annually, semi-annually, quarterly 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; be payable at the place or places within or without the State; and be sold for the price or prices, all as provided in the resolution or resolutions authorizing such bonds and notes. ' Bonds or notes may be issued in one or more installments and from time to time as required. The proceeds of the sale of the bonds or notes shall be deposited in the depository bank or banks. and shall be paid out pursuant to the terms and con- ditions as may be agreed upon by the Authority and the purchasers . C. (1 ) Bonds or notes and any coupons appurte- nant thereto issued under the provisions of this Act shall be signed by the President or Vice-President of the Board of Directors , be attested by the Board's Secretary, and bear the seal of the Authority. (2) The resolution or resolutions authorizing the issuance of any installment or any series of bonds or notes 13 . may prescribe the extent to which the Authority, in executing the bonds or notes and appurtenant coupons , may use facsimile signatures and facsimile seals instead of manual signatures and manually impressed seals. (3) If any officer whose manual or facsimile signa- ture appears on a bond or note or any' coupon 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. (4) Neither the members or officers of the Autho- rity nor anyone executing the bonds, notes or coupons for and on behalf of the Authority shall be liable personally on the bonds , notes or coupons of the Authority by reason of participa- tion in any way in the issuance of them. D. (1 ) The bonds or notes of the Authority may be secured by and payable from pledges of all or any part of the revenues , receipts or assets of the Authority or the revenues of any one or more leases or other contracts theretofore or thereafter made , all of which shall be specified by the resolution of the Authority or in the trust indenture or other instrument securing the bonds or notes . The pledge may reserve the right, under conditions specified in it, to issue additional bonds or notes which will be on a parity with or subordinate to the bonds or notes then being issued. (2) A pledge or security instrument made by the Authority is valid and binding from the time when it is made . The revenues , receipts or assets so pledged and entrusted and thereafter received by the Authority shall immediately be sub- ject to the lien of the pledge or security instrument without any physical delivery 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 14 . Of it. Neither the resolution nor any security instrument or other instrument by which a pledge or security interest is cre- ated need be recorded or filed, and compliance with any pro- vision of any other law is not required in order to perfect' the pledge or other security interest. E. A resolution authorizing bonds or notes or a trust indenture securing bonds or notes may contain provisions , which shall be a part of the agreement with the holders , as to: (1) pledging all or any designated part of the rev- enues and receipts of the Authority, received or to be received from the planning, financing, ownership or operation of, leasing, or otherwise in connection with, any specified facilities or assets to secure the pay- ment of the bonds or notes; (2) pledging all or any part, of assets of the Autho- rity, including any obligation acquired by the Authority, to secure the payment of the bonds or notes; (3) the use and disposition of rentals , rates , fees and other charges made or received by the Authority; i (4) pledging to fix, charge, alter and collect rents , rates , fees and other charges with respect to any designated i facilities or assets which will be sufficient to produce revenues adequate to pay all expenses necessary to the operation and maintenance of the designated facilities or assets of the Authority, to pay the interest on and prin- cipal of all bonds or notes issued and payable out of the revenues and receipts when and as the same become due and 1 payable, to pay all sinking fund and/or reserve or other t fund payments agreed to be made in respect of any of these bonds or notes payable out of the revenues and receipts when and as the same shall become due and payable, and to fulfill the terms of any agreement made with the 15 . holders of the bonds or notes and/or with any person in their behalf; (5) the setting aside of reserves or sinking funds and the regulation and disposition of them; (6) limitations on the purpose to which the proceeds from the sale of the bonds or notes may be applied and pledging the proceeds to secure the payment of the bonds or notes; (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 facilities or assets and the duties of the Authority with reference to them; C9) 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 to, and the manner in which the consent may be given; C10) limitations on the amount of money to be ex- pended .by the Authority for administrative or other expenses ; (11 ) vesting in a trustee or other fiduciary the property, rights, powers and duties in trust as the Autho- rity determines , which may include any of the rights , powers and duties of the trustee appointed by the bondholders or noteholders pursuant to this Act, and abrogating the right of the bondholders or noteholders to appoint a trustee under this Act or limiting the rights , powers and duties of the trustee; (12) placing the management, operation and control of specified facilities or assets of the Authority in - the hands of a board of trustees to be named in the resolution 16 . or trust indenture and specifying the terms of office of the board of trustees , their powers and duties , the manner of exercising the same, the appointment of suc- cessors , and all matters pertaining to their organization and duties; and (13) any other matters , of like or different char- acter, which in any way affect `the security or protection of the bonds or notes or the bondholders of noteholders . F. The resolution authorizing the issuance of the bonds or notes or the trust indenture or other instrument secur- ing them may provide that in the event of a default or, under the conditions therein stated, a threatened default in the pay- ment of principal or of interest on bonds or notes , any court of competent jurisdiction may, upon petition of the holders of outstanding bonds or notes , appoint a receiver with authority to collect and receive pledged revenues and receipts, and the 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. G. Any bonds or notes, including refunding bonds , authorized by this Act may be additionally secured by a trust indenture under which the trustee may be a bank having trust powers situated either within or outside the state. The bonds or notes , within the discretion of both the Authority and the City Council of the City of Baytown, may be additionally secured by a mortgage or a deed of trust lien or security interest on facilities or assets of the Authority and all real property, franchises , easements , leases and contracts and all rights appurtenant to the properties , vesting in the trustee power to sell such facilities or assets for the payment of the indebtedness , power to operate such facilities- or assets and all other powers 17 . and authority for the further security of the bonds or notes . Such trust indenture , regardless of the mortgage or the deed of trust lien or security interest in the facilities or assets may contain any provisions prescribed by the Authority and the City Council of the City of Baytown for the security of the bonds or notes and the preservation of the trust estate, and may make provision for amendment or modification of them, and may condition the right to expend the Authority's money or sell the Authority's facilities or assets upon approval of a registered professional engineer selected as provided therein, 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 resolution or trust indenture may also contain provisions governing the issuance of bonds and notes to replace lost, stolen or mutilated bonds or notes. H. The Authority shall have the power to direct the investment of money in the funds created by the resolutions , trust indentures or other instruments securing the bonds or notes. From the proceeds from the sale of the bonds or notes , the Authority may set aside amounts for payments into the in- terest and sinking fund until completion of construction and until adequate revenues and receipts are available from operations to pay principal and interest, 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. Proceeds from the sale of the bonds or notes may be used for the payment of all expenses . of issuing and selling the bonds or notes . The proceeds from the sale of the bonds and notes and money in any funds created in connection with the bonds or notes may be invested: • (1 ) in direct or indirect obligations of or obli- gations unconditionally guaranteed by the United States 18 . maturing in the manner that may be specified by the re- solution authorizing the bonds or notes or the trust in- denture or other instrument securing the bonds or notes; or (2) in certificates of deposit of any bank or trust company which deposits are secured by the obligations de- scribed in Subdivision (1 ) of this Subsection. I. With the prior approval of the City Council of the City of Baytown, the Authority may provide by resolution for the issuance of refunding bonds or notes to refund outstanding bonds or notes issued under this Act and their accrued interest. The Authority may sell the refunding bonds or notes and use the proceeds to retire the outstanding bonds or notes issued under this Act or the Authority may exchange the refunding bonds or notes for the outstanding bonds or notes . 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 Act relating to original bonds or notes, to the extent that they may be made applicable. The Authority may also refund any bonds or notes ' under the provisions of any general laws of the State of Texas . J. After any bonds and notes , including refunding bonds and notes , are authorized by the Authority, the bonds and notes and the record relating to their issuance shall be submitted to the Attorney General of Texas for his examination as to their validity. If the bonds and notes recite that they are secured by a pledge of the revenues and receipts of a lease or leases or other contract or contracts previously made between the Authority and any person, the leases and contracts may also be submitted to the Attorney General. If the bonds or notes have been validly authorized and if the 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 19 . and the leases or contracts and the bonds or notes shall be registered by the Comptroller of Public Accounts. K. After the bonds or notes, and the leases or other contracts, if any are submitted, have been approved by the Attorney General, and the bonds and notes have been registered by the Comptroller of Public Accounts and delivered to the purchasers , the bonds and notes and any underlying leases and contracts shall , be incontestable for any cause. L. Payment of any bonds and notes according to the term and tenor, performance of agreements with the holders of AWN bonds or notes or any person in their behalf, and performance of official duties prescribed by the provisions of this Act in connection with any bonds or notes may be enforced in any court of competent jurisdiction by mandamus or other appropriate proceeding. M. Bonds issued under the provisions of this Act and coupons , if any, representing interest on them, shall when delivered be considered and construed to be a "security" within the meaning of Chapter 8, Investment Securities, of the Uniform Commercial Code. N. Bonds and notes issued under the provisions of this Act, the interest on them, and the profit from the sale of them, shall be exempt from taxation by the State or by any municipal corporation, county or other political subdivision or taxing district of the State. 0. Bonds and notes issued under this Act, together with the interest on them, shall be secured by and payable only from the sources provided by the terms of this Act. P. The provisions of this Act 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 Act 20 . and the purchasers and holders of any bonds or notes shall never have the right to demand payment thereof from any revenues, receipts or assets of the Authority except those pledged to the payment of bonds or notes . This State, however, pledges and agrees with the holders of any bonds or notes issued under this Act that it will not limit or alter the rights vested in the Authority to fulfill the terms of any agreements made with the holders of the bonds or notes consistent herewith, or in any way impair the rights and remedies of the holders until the bonds or 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 may include this pledge and agreement of the State in any agreements it makes with the holders of the bonds or notes. Sec. 13. A. The Authority shall have the right, power and authority to construct, lay, maintain and operate canals, laterals , ditches, levees, pipelines and all other facilities for the transportation and distribution of water, together with service roads and all other facilities incidental to and designed for use in connection with such transportation and distribution of water, under, along and across any railroad; railroad right- of-way; canal; stream; pipeline; utility line; streets or alleys in cities , towns and villages , subject to reasonable regulation by such cities , towns and villages; and public roads and highways , but such crossings shall not impair the uses of the facilities crossed, and such facilities shall be promptly restored to their former condition of usefulness . B. In the event that the Authority, in the exercise of the power of eminent domain or power of relocation, or any other power granted hereunder, makes necessary the relocation, raising, rerouting or changing the grade of, or altering the 21 . ' construction of, any highway, railroad, electric transmission line, telegraph or telephone properties and facilities , or pipe- line, all such necessary relocation, raising, rerouting, chang- ing of grade or alteration of construction shall be accomplished at the sole expense of the Authority. The term "sole expense" shall mean the actual cost of such relocation, raising, lowering, rerouting, or change in grade or alteration of construction in providing comparable replacement without enhancement of such facilities, after deducting therefrom the net salvage value derived from the old facility. C. The Authority shall not be required to give bond for appeal or bond for costs in any condemnation suit or any other suit to which it may be a party. Sec. 14. With the prior approval of the City Council of the City of Baytown, the Board of Directors of the Authority shall select any bank or banks in the State of Texas to act as depository or depositories for the funds of the Authority. To the extent that funds in the depository bank or banks are. not insured by the Federal Deposit Insurance Corporation, they shall be secured in the manner provided by law for the security of funds of the City of Baytown. So long as the provisions of Article 2529c, Vernon's Texas Civil Statutes are observed, any director of the Authority may be a shareholder in said depository bank or banks. A complete system of accounts shall be kept by the Authority and an audit of its affairs for each year shall be prepared by an independent certified public accountant, or a firm of independent certified public accountants , of recognized integrity and ability. The fiscal year of the Authority shall be from October 1 to September 30 of the following year, unless and until changed by the Board. A written report of the audit shall be delivered to each member of the Board not later than ninety (90) days after the close of each fiscal year; a copy 22 . of such audit report shall be delivered upon request to the holder or holders of at least twenty-five (25) percent of the then out- standing bonds of the Authority; at least five (5) additional copies of said audit shall be delivered to the office of the Authority, one of which shall be kept on file and shall constitute a public record open to inspection by any interested person or persons during normal office hours; and one copy of such audit report shall be filed with the City of Baytown. The cost of such audit shall be paid for by the Authority. Sec. 15. The Board of Directors shall designate, establish and maintain an office or offices of the Authority as provided by Section 54 . 110 , Title 4 , Water Code. Sec. 16. All bonds and refunding bonds of the Authority shall be and are hereby declared to be legal, eligi- ble and authorized investments for banks, savings and loan associations , insurance companies , fiduciaries, trustees , and for the sinking funds of cities, towns, villages, counties , school districts or other political corporations or subdivi- sions of the State of Texas and for all public funds of the State of Texas or its agencies, including the State Permanent School Fund. Such bonds and refunding bonds shall be eligible to secure the deposit of any and all public funds of the State of Texas, cities, towns, villages, counties, school districts or other political corporations or subdivisions of the State of Texas; and such bonds shall be lawful and sufficient secu- rity for said deposits to the extent of their face value, when accompanied by all unmatured coupons appurtenant thereto. Sec. 17 . The Legislature specifically finds and declares that the requirements of Article XVI, Section 59 (d) , Constitution of Texas , have been done and accomplished in due. course and time, and in due order, and that the Legislature f has the power and authority to enact this Act. 23. Sec. 18. If any word, phrase, clause, paragraph, sen- tence, part, portion or provision of this Act or the application thereof to any person or circumstance shall be held to be invalid or unconstitutional, the remainder of this Act shall nevertheless be valid, and the Legislature hereby declares that this Act would have' been enacted without such invalid or unconstitutional word, phrase, clause, paragraph, sentence, part, portion or provision. All of the terms and provisions of this Act are to be liberally. construed to effectuate the purposes, powers, rights , functions and authorities herein set forth. Sec. 19 . The fact that the Authority 's works and pro- jects and conservation measures are immediately and urgently needed hereby establishes and creates and emergency and an im- perative public necessity requiring the Constitutional Rule that bills be read on three several days in each house be sus-. pended, and said Rule is hereby suspended, and this Act shall take effect from and after its passage, and it is so enacted. 24 .