§ 307.043 — ISSUANCE OF REVENUE OBLIGATIONS.

Texas § 307.043

• Jurisdiction: Texas
• Code LG: Local Government Code

Text

Sec. 307.043. ISSUANCE OF REVENUE OBLIGATIONS. (a) This section applies to the bonds and other obligations issued under Section 307.042 .
(b) The bonds shall be made payable to the bearer or to the order of a named payee. The bonds are payable solely from the pledged revenues and, at the option of the municipality, secured by the mortgage and franchise authorized by Section 307.042 .
(c) The bonds shall bear interest at a rate not to exceed the maximum net effective interest rate provided by Chapter 1204 , Government Code.
(d) The bonds must mature serially or otherwise not more than 40 years after the date of issuance. The governing body of the municipality shall determine:
(1) the denominations of the bonds;
(2) one or more places at which the bonds are payable as to interest or principal, which may be any bank inside or outside this state;
(3) the medium for payment of the bonds;
(4) the manner in which interest on the bonds is payable;
(5) any provisions for redemption of the bonds before maturity; and
(6) the form of the bonds.
(e) A bond or interest coupon bearing the signature or facsimile signature of an official of the municipality who was authorized to sign the bond or coupon at the time of the signature is not invalid because of the official's ceasing to hold the office before delivery of the bonds or not having held office on the date of the bonds.
(f) The governing body may provide for the bonds to be registrable as to principal and interest, or as to principal only, under the terms prescribed by the governing body. The bonds may be issued not subject to registration.
(g) The bonds may be executed in the manner set forth in the proceedings authorizing their issuance, and those proceedings may provide that the bonds or coupons, or both, shall be executed by facsimile signatures and that a facsimile seal of the municipality be printed on the bonds.
(h) In the proceedings authorizing the issuance of the bonds, the governing body may prohibit the further issuance of bonds payable from the pledged revenues or may reserve the right to issue additional bonds to be secured by a pledge of and payable from those net revenues on a parity with or subordinate to the lien and pledge in support of the bonds being issued, subject to any conditions as set forth in the proceedings.
(i) If a bond recites that it is secured partially or otherwise by a pledge of the proceeds of one or more contracts made between the municipality and one or more other parties, including a lease or operating contract, a copy of the contracts and the proceedings authorizing the contracts shall be submitted to the attorney general. Approval of the bonds by the attorney general constitutes approval of the contracts, which makes the contracts incontestable except for forgery or fraud.
(j) A bond or other obligation is not a debt of the municipality, but is solely a charge on the income and properties encumbered. The obligation may not be considered in determining the power of the municipality to issue bonds for a purpose authorized by law. Each obligation must contain substantially the following clause: "The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxation."
(k) The nature of the pledge of income and encumbrance of properties to secure the obligations and the control, management, and operation of the properties while any of the obligations remain unpaid is subject to and governed by Chapter 1502 , Government Code, in the same manner as parks described in Section 1502.051. The issuance of the bonds does not require an election.

Legislative History

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.314, eff. Sept. 1, 2001.