(a) The commission may dissolve a district that has no outstanding bonded indebtedness.
(b) A district composed of territory entirely within one county may be dissolved even if the district has outstanding indebtedness that matures after the year in which the district is dissolved, whereupon the commissioners court shall levy and collect taxes on all taxable property in the district in an amount sufficient to pay the principal of and interest on the indebtedness when due. The taxes shall be levied and collected in the same manner as county taxes.
Official text of the Texas Water Code as published by the Texas Legislative Council.