Sec. 130.125. REVENUE OBLIGATIONS. (a) As used in this section:
(1) "Credit agreement" means a loan agreement, revolving credit agreement, agreement establishing a line of credit, letter of credit, reimbursement agreement, insurance contract, commitment to purchase obligations, purchase or sale agreement, or commitment or other contract or agreement authorized and approved by the governing body of the issuer in connection with the authorization, issuance, security, exchange, payment, purchase, or redemption of obligations or interest thereon.
(2) "Eligible project" means any project or purpose for which an issuer is authorized to issue revenue bonds pursuant to Section 130.123 of this code or any other provision of law.
(3) "Governing body" means the governing board of an issuer.
(4) "Issuer" means a junior college district or a regional college district.
(5) "Obligations" means notes, warrants, or other special obligations authorized to be issued by an issuer under the provisions of this section and all "public securities" as defined by Section 1201.002 , Government Code, which prior to the delivery thereof, have been rated by a nationally recognized rating agency for municipal securities in either one of the three highest ranking categories for short-term obligations or one of the four highest ranking categories for long-term obligations. It is provided, however, that the term "obligations" does not mean or include any obligations payable from ad valorem taxes.
(6) "Project costs" means all costs and expenses incurred in relation to an eligible project, including without limitation design, planning, engineering, and legal costs, acquisition costs of land, interest in land, rights-of-way, and easements, construction costs, costs of machinery, equipment, and other capital assets incident and related to the operation, maintenance, and administration of an eligible project, and financing costs, including interest during construction and thereafter, underwriter's discount and fees for legal, financial, and other professional services. Project costs attributable to an eligible project and incurred prior to the issuance of any obligations issued to finance an eligible project may be reimbursed from the proceeds of sale of obligations.
(b) The governing body of an issuer is hereby authorized and empowered to issue, sell, and deliver obligations and execute credit agreements in order to finance project costs of an eligible project or to refund obligations issued in connection with an eligible project, subject to the limitations contained herein. Obligations shall be secured solely by: (1) the proceeds of sale of other obligations; (2) any revenues which the issuer is authorized by any statute or constitutional provision to pledge to the payment of any obligations; or (3) any one or more of such sources, including credit agreements, all as the governing body of the issuer shall provide in the resolution or order authorizing the issuance of the obligations. Obligations shall be repaid from the source or sources securing the payment thereof, funds received from a credit agreement, or from any other revenues otherwise legally available for the payment thereof, except funds derived from ad valorem taxation.
(c) The issuance of obligations shall be authorized by resolution or order of the governing body of an issuer, which resolution or order shall fix the maximum amount of obligations to be issued or, if applicable, the maximum principal amount which may be outstanding at any time, the maximum term obligations issued and delivered pursuant to such authorization shall be outstanding, the maximum interest rate to be borne by the obligations (within the limitations of Chapter 1204 , Government Code), the manner of sale (which may be by either public or private sale), price, form, terms, conditions, and covenants thereof. The resolution or order authorizing the issuance of obligations may provide for the designation of a paying agent and registrar for the obligations and may authorize one or more designated officers or employers of the issuer to act on behalf of the issuer from time to time in the selling and delivering of obligations authorized and fixing the dates, price, interest rates, interest payment periods, and other procedures as may be specified in the resolution or order. Obligations may be issued in such form or such denomination, payable at such time or times, in such amount or amounts or installments, at such place or places, in such form, under such terms, conditions, and details, in such manner, redeemable prior to maturity at any time or times, bearing no interest, or bearing interest at any rate or rates (either fixed, variable, floating, adjustable, or otherwise, all as determined in accordance with the resolution or order providing for the issuance of the obligations, which resolution or order may provide a formula, index, contract, or any other arrangement for the periodic determination of interest rates), not to exceed the maximum net effective interest rate allowed by law and may be signed or otherwise executed in such manner, with manual or facsimile signatures, and with or without a seal, all as shall be specified by the governing body of the issuer in the resolution or order authorizing the issuance of the obligations. The proceeds received from the sale of obligations may be deposited or invested in any manner and in such obligations as may be specified in the resolution or order or other proceedings authorizing the obligations. In the event any officer or officers whose signatures are on any obligations cease to be such officer or officers before the delivery thereof to the purchaser, such signature or signatures shall nevertheless be valid and sufficient for all purposes and the successor or successors in office of any such officers shall be fully authorized to complete the execution, authentication, or delivery of said obligations to the purchaser or purchasers thereof.
(d) The governing body of an issuer may enter into credit agreements in conjunction with the issuance, payment, sale, resale, or exchange of obligations to enhance the security for or provide for the payment, redemption, or remarketing of the obligations and interest on the obligations or to reduce the interest payable on the obligations. A credit agreement is an agreement for professional services and shall contain the terms and conditions and be for the period that the governing body of the issuer approves. The cost to the issuer of the credit agreement may be paid from the proceeds of the sale of the obligations to which the credit agreement relates or from any other source, including revenues of the issuer that are available for the purpose of paying the obligations and the interest on the obligations or that may otherwise be legally available to make those payments.
(e) Obligations, including accrued interest, may from time to time be refinanced, renewed, or refunded by the issuance of other obligations. Credit agreements entered into by an issuer, whether pursuant to the provisions of this section or not, may be refinanced, renewed, refunded, or otherwise terminated and a new credit agreement substituted therefor by amendment to the proceedings which authorized such credit agreements and, if required to accomplish the substitution of credit agreements, outstanding bonds may be refunded with obligations.
(f) Preliminary to the issuance and delivery of obligations, the resolution or order authorizing the issuance thereof, together with any credit agreements and any contracts providing revenues and security to pay the obligations, shall be submitted to the attorney general for his review. If the attorney general shall find that such credit agreement or agreements, if any, contracts, if any, and other authorizing proceedings conform to the requirements of the Texas Constitution and this section, the attorney general shall approve them. Thereafter, the authorized obligations may be executed and delivered, exchanged, or refinanced from time to time in accordance with the authorizing proceedings. Upon such approval by the attorney general and initial delivery of any obligations so authorized, any such credit agreements, any such contracts providing revenues or security, such initial obligations, and all other obligations thereafter issued pursuant to the authorizing proceedings shall be incontestable for any cause in any court or other forum and shall be valid and binding obligations enforceable in accordance with their respective terms and provisions.
(f-1) The governing body of an "eligible issuer" may enter into credit agreements as described in Subsection (d). As used in this subsection, "eligible issuer" means an issuer that prior to the effective date of this subsection (i) issued bonds which, prior to or simultaneously with the delivery thereof, were rated by a nationally recognized rating agency for municipal securities in one of the four highest ranking categories for long-term obligations, and (ii) reserved in the resolution or order authorizing issuance of the bonds the right, in the event of a change in state law, to substitute a credit agreement in lieu of cash and investments in a reserve fund established pursuant to the resolution or order.
(g) All obligations issued by an issuer shall constitute negotiable instruments and are investment securities governed by Chapter 8 , Business & Commerce Code, notwithstanding any provisions of law or court decision to the contrary and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, and trustees and for the sinking funds of cities, towns, villages, school districts, and other political subdivisions or public agencies of the State of Texas. Said obligations also are eligible to secure deposits of any public funds of the state or any political subdivision or public agency of the state and are lawful and sufficient security for the deposits to the extent of their market value.
(h) This section shall be construed liberally to effectuate the legislative intent and purposes of this section and all powers herein granted shall be broadly interpreted to effectuate such intent and purposes and not as a limitation of powers.
(i) In case any one or more of the provisions, clauses, or words of this section or the application of such provisions, clauses, or words to any situation or circumstance shall for any reason be held to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect any other provisions, clauses, or words of this section or the application of such provisions, clauses, or words to any other situation or circumstance, and it is intended that this section shall be severable and shall be construed and applied as if any such invalid or unconstitutional provision, clause, or word had not been included herein.
(j) This section shall be cumulative of all other laws on the subject, but this section shall be wholly sufficient authority within itself for the issuance of obligations and the performance of the other acts and procedures authorized hereby, or under any agreement, without reference to any other laws or any restrictions or limitations contained herein. To the extent of any conflict or inconsistency between any provisions of this section and any provisions of any other law, the provisions of this section shall prevail and control; provided, however, that any issuer shall have the right to use the provisions of any other laws not in conflict with the provisions hereof to the extent convenient or necessary to carry out any power or authority, express or implied, granted by this section.
(k) When the governing body of any issuer provides in the resolution or order or other proceedings authorizing the issuance of any bond, any credit agreement, or any other agreement for a pledge or lien on revenues, income, or other resources of the issuer, or the assets of the issuer, or any fund maintained by the issuer to secure payment of the obligations or to secure payments required by a credit agreement or any other agreement, such pledge or lien shall be valid and binding in accordance with its terms without further action on the part of the issuer and without any filing or recording with respect thereto except in the records of the issuer. All such liens and pledges shall be perfected from the time of payment for and delivery of the obligations and the credit agreement or other agreement until the obligations or other payments, including those under the credit agreement, have been paid or payment of the obligations has been provided for or the terms of the credit agreement or other agreement have been satisfied in accordance with their respective terms and such lien shall be fully perfected as to items then on hand and thereafter received until the satisfaction of such obligations, and said items shall be subject to such liens or pledges without any physical delivery thereof or further act. Nothing contained in this section shall relieve any issuer of any obligation to file or record any lien on realty or submit any issue of obligations for approval by the attorney general and registration by the comptroller of public accounts.