Tex.
Local Gov't Code Section 320.079
Miscellaneous Provisions
(a)
This section applies to revenue bonds and refunding bonds issued under this subchapter.(b)
The bond order may require that the bonds contain a recital to the effect that they are issued pursuant to and in strict conformity with this subchapter. That recital is conclusive evidence of the validity of the bonds and the regularity of their issuance.(c)
Each bond is exempt from taxation by this state or by a municipal corporation, county, or other political subdivision or taxing district or entity of the state.(d)
If provided for in the bond order, an indenture securing the bonds may be entered into between, and executed by, the county and a corporate trustee, or entered into between, and executed by, the county and a corporate trustee and a corporate or individual cotrustee. A corporate trustee or corporate cotrustee must be a trust company or bank in or outside this state that has the powers of a trust company.(e)
The bond order or any indenture may:(1)
contain provisions for protecting or enforcing the rights or remedies of the bondholders as the commissioners court considers reasonable and proper and not in violation of law, including covenants setting forth the duties of the county and the board in reference to maintenance, operation, repair, and insurance (including insurance against loss of use and occupancy) of the properties or facilities whose revenues are pledged, and the custody, safeguarding, and application of the bond proceeds and of the revenues to be received from the operation of the properties or facilities;(2)
provide for the flow of funds and the establishment and maintenance of the interest and sinking fund, reserve fund or funds, and other funds; and(3)
include additional covenants with respect to the bonds and the pledged revenues and the operation, maintenance, and upkeep of those properties and facilities the income of which is pledged, as the commissioners court considers appropriate.(f)
Any bank or trust company in this state may act as depository for the proceeds obtained from the sale of the bonds. The depository shall be selected by the commissioners court without the necessity of seeking competitive bids and without reference to any other statute. The money deposited must be secured in the manner and amount as prescribed by the commissioners court or by the bond order, indenture, or separate escrow agreement.(g)
The bond order shall provide for and designate the depository or depositories of the interest and sinking fund, reserve fund or funds, and any other funds established by the order. The depository or depositories may be any bank or trust company in or outside this state and may be selected and designated without the necessity of seeking competitive bids and without reference to any other statute. The money in those funds must be secured in the manner and to the extent as provided in the bond order, and the bond order may require that the money be secured by direct obligations of the United States or obligations unconditionally guaranteed by the United States.(h)
The bond order or indenture may:(1)
set forth the rights and remedies of the bondholders and of the trustee, and may, subject to Subsection (i), restrict the individual rights of action of the bondholders; and(2)
set forth and contain other provisions and covenants as considered reasonable and proper for the security of the bondholders, including:(A)
provisions prescribing occurrences that constitute events of default and the terms and conditions on which any or all of the bonds become due, or may be declared to be due, before maturity; and(B)
provisions as to the rights, liabilities, powers, and duties arising from the breach by the board or by the commissioners court of any of its duties or obligations.(i)
Any holders of the bonds or of interest coupons originally attached to the bonds may either at law or in equity, by suit, action, mandamus, or other proceeding, enforce and compel performance of all duties required by this subchapter to be performed by the board or by the commissioners court, including:(1)
the making and collection of reasonable and sufficient fees, charges, and tolls for the use of the properties and facilities the income of which is pledged;(2)
the segregation of the income and revenues of such properties and facilities; and(3)
the application of the income and revenues pursuant to the bond order, indenture, and this subchapter.(j)
The bond order or the indenture may contain provisions to the effect that while any bonds are outstanding either as to principal or interest, no free service may be rendered by any of the properties or facilities the income of which is pledged.(k)
The bonds are negotiable instruments under Chapter 3 (Insolvency, Fraudulent Transfers, and Fraud), Business & Commerce Code, and are legal and authorized investments for banks, savings banks, trust companies, savings and loan associations, insurance companies, fiduciaries, trustees, guardians, and for the sinking funds of municipalities, counties, school districts, and other political subdivisions or corporations of this state. The bonds are eligible to secure the deposit of public funds of this state and of a municipality, county, school district, or other political subdivision or corporation of this state. The bonds are lawful and sufficient security for those deposits to the extent of their face value when accompanied by all unmatured appurtenant coupons.(l)
The bond order, the indenture, and this subchapter constitute an irrevocable contract between the board and commissioners court and the holders of the bonds.
Source:
Section 320.079 — Miscellaneous Provisions, https://statutes.capitol.texas.gov/Docs/LG/htm/LG.320.htm#320.079 (accessed May 18, 2024).
