A. Notwithstanding the provisions of section 48-261 or 48-262, a sanitary district shall not include territory located within an incorporated city or town at the time the district is established and the territory included in a sanitary district is required to be contiguous except as provided in section 48-2002.

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B. In addition to the requirements set forth in section 48-261, a sanitary district may be formed only for:

1. The purposes of regulating, purchasing, establishing, constructing and operating a sewerage system or a sewage sludge or by-product processing and disposal system which is owned by the district or any person and which provides for sewage collection, treatment and disposal in the district. The system may include the collection, transportation, pumping, treatment and disposal of sewage, processing, treating and disposing of sewage sludge and other by-products of sewage treatment.

2. Purchasing, establishing, constructing and operating a garbage disposal and treatment system. The garbage system shall be limited to the disposal and treatment of garbage, rubbish, trash and waste materials and shall not include collection.

C. In addition to the requirements set forth in sections 48-261 and 48-262, no territory which lies within an urbanized area, as defined in Section 9-101.01, shall be included in or annexed to a sanitary district unless the city or town shall have approved the inclusion or annexation of said territory into the sanitary district, or, upon request of the parties seeking annexation or inclusion of territory within the sanitary district, the city or town has failed to act upon such request and either approve or deny the request within one hundred twenty days of its presentation to the city or town.

D. A sanitary district established under this chapter is a body corporate with the powers, privileges and immunities generally granted to municipal corporations by the constitution and laws of this state for the purposes prescribed by this chapter.

E. A sanitary district may change its name by resolution unanimously adopted by its board of directors. Before adopting a resolution to change the name of the district, the board shall give notice to all residents and property owners within the district by publication of the notice at least twenty days before the date of the hearing of the board at which the name change will be considered. The notice shall be placed in a newspaper of general circulation within the district. The district shall also mail to each customer of the district within the district a notice of name change at least thirty days before the hearing on the change of name. At the hearing the customers and landowners shall be entitled to be heard as to why the name should or should not be changed. Following the hearing the board shall act on the resolution changing the name of the district.