1. (a) A local government may contract or agree with another local government to perform governmental functions and services in accordance with this chapter.

2. (b) A party to an interlocal contract may contract with a:

   1. (1) state agency, as that term is defined by Section 771.002; or
   2. (2) similar agency of another state.

3. (c) An interlocal contract may be to:

   1. (1) study the feasibility of the performance of a governmental function or service by an interlocal contract; or
   2. (2) provide a governmental function or service that each party to the contract is authorized to perform individually.

4. (d) An interlocal contract must:

   1. (1) be authorized by the governing body of each party to the contract unless a party to the contract is a municipally owned electric utility, in which event the governing body may establish procedures for entering into interlocal contracts that do not exceed $100,000 without requiring the approval of the governing body;
   2. (2) state the purpose, terms, rights, and duties of the contracting parties; and
   3. (3) specify that each party paying for the performance of governmental functions or services must make those payments from current revenues available to the paying party.
5. (e) An interlocal contractual payment must be in an amount that fairly compensates the performing party for the services or functions performed under the contract.
6. (f) An interlocal contract may be renewed annually.
7. (f) An interlocal contract may be renewed.
8. (g) A governmental entity of this state or another state that makes purchases or provides purchasing services under an interlocal contract for a state agency, as that term is defined by Section 771.002, must comply with Chapter 2161 in making the purchases or providing the services.
9. (i) Notwithstanding Subsection (d), an interlocal contract may have a specified term of years.

Added by Acts 1991, 72nd Leg., ch. 38, Sec. 1, eff. Sept. 1, 1991.

Amended by Acts 1999, 76th Leg., ch. 405, Sec. 47, eff. Sept. 1, 1999;

Acts 2001, 77th Leg., ch. 98, Sec. 2, eff. Sept. 1, 2001.

Acts 2011, 82nd Leg., R.S., Ch. 1065 (S.B. 760), Sec. 1.