Tex. Local Government Code § 43.074

(a) A water control and improvement district, fresh water supply district, or municipal utility district created from area that, at the time of the district's creation, is located wholly in a municipality may be abolished as provided by this section.

(b) On a vote of at least two-thirds of the entire membership of the governing body of the municipality, the governing body may adopt an ordinance abolishing the district if the governing body finds:

(1) that:

(A) the district is no longer needed; or

(B) the services furnished and functions performed by the district can be furnished and performed by the municipality; and

(2) that the abolition of the district is in the best interests of the residents and property in the municipality and the district.

(c) If before the effective date of the ordinance or if within 30 days after the effective date or the date of the publication of the ordinance, a petition that is signed and verified by a number of qualified voters of the municipality equal to at least 10 percent of the total votes cast at the most recent election for municipal officers is filed with the secretary of the municipality protesting the enactment or enforcement of the ordinance, the ordinance is suspended and any action taken under the ordinance is void. Immediately after the filing of the petition, the secretary shall present it to the governing body. Immediately after the presentation of the petition, the governing body shall reconsider the ordinance. If the governing body does not repeal the ordinance, the governing body shall submit it to a popular vote at the next municipal election or at a special election the governing body may order for that purpose. The ordinance does not take effect unless a majority of the votes received in the election favor the ordinance.

(d) On the adoption of the ordinance, the district is abolished, the property and other assets of the district vest in the municipality, and the municipality assumes and becomes liable for the bonds and other obligations of the district. The municipality shall perform the services and other functions that were performed by the district.

(e) If a district bond, warrant, or other obligation payable in whole or in part from property taxes is assumed by the municipality, the governing body shall levy and collect taxes on all taxable property in the municipality in an amount sufficient to pay the principal of and interest on the bond, warrant, or other obligation as it becomes due and payable.

(f) The municipality may issue refunding bonds in its own name to refund bonds, warrants, or other obligations, including unpaid accrued interest on an obligation, that is assumed by the municipality. The refunding bonds must be issued in the manner provided by Chapter 1207, Government Code.