IN OCTOBER 1975 A SECOND SURVEY OF INTERLOCAL CONTRACTING PRACTICES IN TEXAS WAS CONDUCTED (THE FIRST SURVEY WAS CONDUCTED IN 1972, RESULTING IN A 'HANDBOOK FOR INTERLOCAL CONTRACTING IN TEXAS'). QUESTIONNAIRES WERE SENT TO EVERY MUNICIPALITY AND COUNTY IN THE STATE, AS WELL AS TO ALL COUNCILS OF GOVERNMENTS AND CERTAIN SPECIAL DISTRICTS, REQUESTING INFORMATION ON THE TYPES OF SERVICES CONTRACTED, FORM, FREQUENCY OF SERVICE, AND DURATION OF AGREEMENT. ALTHOUGH RESULTS SHOW THAT CONTRACTING BY RESPONDING CITIES HAS INCREASED FROM 55 PERCENT IN 1972 TO 70 PERCENT IN 1975, THE INTERLOCAL CONTRACTING DEVICE IS UNDERUSED BY MANY GOVERNMENT SERVICES THAT COULD BENEFIT FROM SUCH CONTRACTING. THE LACK OF PERCEIVED BENEFIT IS A MAJOR OBSTACLE TO MORE EXTENSIVE INTERLOCAL CONTRACTING. THROUGH THE GENERAL AUTHORITY OF THE STATE'S INTERLOCAL COOPERATION ACT AND OTHER ENABLING LAWS, THE OPPORTUNITY EXISTS FOR COUNTY AND LOCAL GOVERNMENTS TO CUT COSTS AND IMPROVE SERVICES IN THOSE FUNCTIONS WHICH ARE SUITABLE FOR COOPERATIVE ARRANGEMENTS. MAJOR FUNCTIONAL AREAS OF LOCAL GOVERNMENT WHERE INTERLOCAL CONTRACTING CAN BE EFFECTIVE ARE LAW ENFORCEMENT, FIRE PROTECTION, WATER RESOURCE, SEWAGE TREATMENT AND DISPOSAL, SOLID WASTE, PARKS AND RECREATION, HEALTH AND WELFARE, LIBRARIES, CODE ENFORCEMENT, AND TAX ASSESSMENT AND COLLECTION. TABLES AND FOOTNOTES ARE INCLUDED. THE APPENDIXES CONTAIN TABLES OF SURVEY DATA, A SUMMARY OF TEXAS LAWS, AND SELECTED FORMS THAT CAN BE USED IN INTERLOCAL COOPERATION. (RCB)