(a) The commissioners court of a county that has a population of more than 1.3 million and in which a municipality with a population of more than one million is primarily located may enter a contract with a district created under Article III, Sections 52(b)(1) and (2), or Article XVI, Section 59, of the Texas Constitution under which the district will provide and operate a water supply system or sewage system in areas of the county located outside the limits of a municipality.
(b) The commissioners court may distribute federal funds and state water conservation and development funds received by the county to a district that is a party to a contract under this section. Those funds may be used only for the construction, renovation, or maintenance of a water supply system or sewage system that is covered by a contract under this section.
(c) The acts performed and services provided under this section by a district must be within the scope of the powers, duties, and purposes of the district as provided by the laws under which the district was created.
(d) A contract that affects a municipality's extraterritorial jurisdiction as established by Chapter 42 must be submitted to and approved by the municipality.
(e) If a contract under this section affects an area not located within the limits of the contracting district, district funds may not be used to fulfill the contract.
(f) A county and a district that contract under this section must submit the contract to the Texas Commission on Environmental Quality for approval. The commission shall examine the contract to assure that the interests of the residents of the district are served and protected. A county may not enter a contract that the commission determines would jeopardize the quality of service provided by a district to the persons residing in the district. The commission may submit suggested changes to the parties for inclusion in the contract before the commission gives its approval.