(a) The authority may contract with a municipality located inside its boundaries for the purchase, lease, use, management, control, or operation of a water distribution plant or system owned by the municipality in accordance with the terms mutually agreed on by the governing bodies of the authority and the municipality.
(b) The authority may acquire by a contract described by Subsection (a) rights in surface water or groundwater belonging to the municipality.
(c) The authority may use water rights acquired from a municipality under Subsection (b) only for:
(1) a purpose for which the municipality would be authorized to use them; and
(2) the purposes of the municipality's water distribution plant or system.