CHAPTER 1507. OBLIGATIONS RELATING TO MUNICIPAL DEBT AND EXPENSES

State Codes and Statutes

Statutes > Texas > Government-code > Title-9-public-securities > Chapter-1507-obligations-relating-to-municipal-debt-and-expenses

GOVERNMENT CODE

TITLE 9. PUBLIC SECURITIES

SUBTITLE J. SPECIFIC AUTHORITY FOR MUNICIPALITIES TO ISSUE

SECURITIES

CHAPTER 1507. OBLIGATIONS RELATING TO MUNICIPAL DEBT AND EXPENSES

SUBCHAPTER A. BONDS FOR PAYMENT OF JUDGMENTS

Sec. 1507.001. AUTHORITY TO ISSUE BONDS. A municipality may

issue, sell, and deliver bonds in an amount sufficient to pay a

final judgment of a court, plus the interest and the costs and

expenses connected with the judgment, if:

(1) the judgment is against the municipality or the payment of

the judgment is the legal responsibility of the municipality;

(2) the judgment awards the plaintiff an amount in cash; and

(3) the municipality does not have money available to pay the

amount of the judgment plus the interest and the cost and

expenses connected with the judgment or decree.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.002. ELECTION. (a) A municipality may not issue

bonds under this subchapter unless the bonds are authorized by a

majority vote of the qualified voters of the municipality voting

at an election held for that purpose.

(b) A municipality shall hold an election to issue bonds under

this subchapter in the manner provided for other bond elections

in the municipality.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.003. MATURITY. A bond issued under this subchapter

must mature not later than 40 years after its date.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER B. REFUNDING OF REFUNDING BONDS ISSUED UNDER

BANKRUPTCY PLAN

Sec. 1507.051. AUTHORITY TO ISSUE REFUNDING BONDS. (a) The

governing body of a municipality by ordinance may issue refunding

bonds in accordance with Subchapters A and D, Chapter 1207, to

refund outstanding refunding bonds if:

(1) the bonds to be refunded were issued under a plan for the

adjustment of the municipality's debts confirmed by a bankruptcy

court under Title 11, United States Code; and

(2) the bonds do not mature in annual installments.

(b) The governing body of a municipality that issues bonds under

this subchapter to refund revenue bonds may secure the bonds

issued under this subchapter by a deed of trust on the

municipality's utility system or by a pledge of the net revenue

of the system if the bonds being refunded provide for that

pledge.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.052. SALE OF BONDS. (a) Instead of exchanging

refunding bonds issued under this subchapter for the bonds being

refunded, a municipality may, at any time after calling the bonds

being refunded for redemption in the manner provided in those

bonds, sell the refunding bonds or the unexchanged portion of the

refunding bonds.

(b) The municipality shall deposit the principal amount received

from the sale of the refunding bonds, and the additional amount

necessary to pay the interest to the call date, with the bank at

which the bonds being refunded are payable.

copy of the ordinance authorizing the refunding bonds. The

comptroller shall register the refunding bonds without the

cancellation of the bonds being refunded and shall deliver the

refunding bonds as provided in the ordinance.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.053. SIGNATURES. A bond issued under this subchapter

must be signed by the mayor of the municipality and the secretary

or clerk of the municipality.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.054. APPLICABILITY OF MUNICIPAL CHARTER. A provision

of a municipal charter relating to the terms, issuance, sale, or

delivery of bonds does not apply to a bond issued under this

subchapter.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER C. REFUNDING OF REFUNDING BONDS ADJUDICATED AS VALID

OR ISSUED UNDER BANKRUPTCY PLAN

Sec. 1507.101. AUTHORITY TO ISSUE REFUNDING BONDS. The

governing body of a municipality by ordinance may issue refunding

bonds in accordance with Subchapters A and D, Chapter 1207, to

refund outstanding refunding bonds:

(1) that:

(A) a federal court by decree adjudicated to be valid; or

(B) were issued under a plan for the adjustment of the

municipality's debts confirmed by a bankruptcy court under Title

11, United States Code; and

(2) that were issued under the authority of an ordinance

specifying a minimum fixed tax rate to be imposed in each year

during which any of those bonds or interest on those bonds is

outstanding.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.102. SALE OF BONDS. (a) Instead of exchanging

refunding bonds issued under this subchapter for the bonds being

refunded, a municipality may sell the refunding bonds or the

unexchanged portion of the refunding bonds.

(b) The municipality shall deposit the principal amount received

from the sale of the refunding bonds, and the additional amount

necessary to pay the interest to the call date or maturity dates,

with the bank at which the original refunding bonds are payable.

copy of the ordinance authorizing the refunding bonds. The

comptroller shall register the refunding bonds without the

cancellation of the bonds being refunded and shall deliver the

refunding bonds as provided in the ordinance.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.103. SIGNATURES. A bond issued under this subchapter

must be signed by the mayor of the municipality and the secretary

or clerk of the municipality.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.104. APPLICABILITY OF MUNICIPAL CHARTER. A provision

of a municipal charter relating to the terms, issuance, sale, or

delivery of bonds does not apply to a bond issued under this

subchapter.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER D. TAX BONDS FOR PAYMENT OF CURRENT EXPENSES

Sec. 1507.151. AUTHORITY TO ISSUE BONDS. (a) The governing

body of a municipality by ordinance may issue bonds secured by

and payable from ad valorem taxes to provide for the payment of

all or part of the municipality's current expenses for a fiscal

year if:

(1) in that fiscal year the municipality has lost or is likely

to lose an amount that is:

(A) more than $15 million; and

(B) more than 15 percent of the municipality's budget for the

fiscal year, not including the amount necessary for debt service;

and

(2) the loss or potential loss is the result of a person who

received municipal funds seeking or acceding to protection under

Title 11, United States Code.

(b) A determination by the municipality's governing body that a

loss has occurred or is likely to occur, or of the amount of a

loss or anticipated loss, is conclusive.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.152. PLEDGE OF TAX. The governing body may pledge to

the payment of the bonds issued under this subchapter an ad

valorem tax sufficient to pay when due the principal of and

interest on the bonds.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.153. ELECTION. The governing body of a municipality

may issue bonds under this subchapter without an election.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.154. LIMITATION. A municipality may not issue bonds

under this subchapter in a principal amount that:

(1) exceeds the amount of loss sustained or anticipated by the

municipality and the cost of issuing the bonds; or

(2) would result in the outstanding aggregate principal amount

of tax bond indebtedness of the municipality exceeding 10 percent

of the assessed valuation of taxable property in the municipality

according to the most recent ad valorem tax roll of the

municipality.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.155. MATURITY. Bonds issued under this subchapter

must mature not later than five years after their date of

issuance as provided by the ordinance authorizing the issuance

and sale of the bonds.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.156. SALE OF BONDS. A municipality may sell bonds

issued under this subchapter at a public or private sale as

provided by the ordinance authorizing the issuance and sale of

the bonds.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.157. NO WAIVER OF CLAIMS. (a) A municipality's

action under this subchapter does not affect or abrogate any

claim the municipality may have with respect to a loss described

by Section 1507.151.

(b) A municipality that issues bonds under this subchapter:

(1) does not waive any claim of the municipality;

(2) is not estopped from recovering on a claim of the

municipality; and

(3) does not ratify any prior action by the municipality in

connection with the loss.

have in its action authorizing the bonds.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.158. REDEMPTION OF BONDS. After the recovery of a

loss described by Section 1507.151 or the failure of an

anticipated loss described by Section 1507.151 to occur, the

governing body shall promptly redeem bonds issued to cover the

loss or anticipated loss in a principal amount equal to the

amount recovered or the amount of anticipated loss that did not

occur.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.159. CONFLICT WITH MUNICIPAL CHARTER. To the extent

of a conflict between this subchapter and a municipal charter,

this subchapter controls.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.160. CONSTRUCTION. This subchapter shall be liberally

construed to achieve the legislative intent and purposes of this

subchapter. A power granted by this subchapter shall be broadly

interpreted to achieve that intent and those purposes.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER E. NOTES TO FUND OR REFUND GENERAL OPERATING EXPENSES

IN MUNICIPALITIES WITH A POPULATION OF 35,000 TO 45,000

Sec. 1507.201. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a home-rule or special-law municipality with a

population of 35,000 to 45,000.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.202. AUTHORITY TO ISSUE NOTES. A municipality may

issue notes to fund or refund outstanding warrants that were

drawn against the municipality's general fund for general

operating expenses and issued during the calendar year preceding

the calendar year in which the notes are issued.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.203. ELECTION. (a) Before a municipality may issue

notes under this subchapter, the governing body of the

municipality shall order an election on the question of

authorizing the governing body to issue the notes.

(b) The governing body shall hold, give notice of, and declare

the results of an election under this section in the manner

provided by general law for bond elections in the municipality.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.204. AUTHORITY TO PASS ORDINANCES AND RESOLUTIONS. If

the issuance of the notes is authorized at the election, the

governing body of the municipality may pass ordinances and

resolutions for the issuance of the notes.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.205. MATURITY. A note issued under this subchapter

must mature not later than 10 years after its date.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.206. PLEDGE. A municipality may pledge the full faith

and credit of the municipality to the payment of a note issued

under this subchapter and the interest on the note.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.207. PAYMENT OF WARRANTS WHILE NOTES ARE OUTSTANDING.

If a warrant is drawn against the municipality's general fund

during a calendar year in which a note issued under this

subchapter is outstanding, the municipality shall pay the warrant

from current funds appropriated for the purpose for which the

warrant is drawn. The municipality may not fund or refund the

warrant.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER F. BONDS FOR PAYMENT OF CURRENT EXPENSES IN

MUNICIPALITIES WITH A POPULATION OF 161,000 OR MORE

Sec. 1507.251. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a municipality with a population of 161,000 or

more.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.252. AUTHORITY TO ISSUE WARRANTS OR NOTES. (a) The

governing body of a municipality may issue warrants or notes

drawn against the current revenues of the municipality for the

fiscal year to:

(1) provide for the payment of the municipality's expenses for

the fiscal year in which the warrants or notes are issued or for

any portion of that fiscal year; or

(2) refund the principal of and interest on warrants and notes

issued under this subchapter.

(b) Warrants and notes issued under this subchapter must be

dated and numbered consecutively as issued.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.253. PLEDGE OF REVENUE; PAYMENT. (a) A warrant or

note issued under this subchapter is a lien on:

(1) the revenue of the municipality for the fiscal year during

which the warrant or note is issued that is available for payment

of the warrant or note; or

(2) a designated portion of that revenue.

(b) A municipality shall pay a warrant or note:

(1) consecutively according to its respective date and number as

money for payment becomes available; or

(2) on a date during the fiscal year on which, in the estimate

of the governing body, sufficient revenue will be available for

payment of the warrant or note.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.254. LIMITATION ON AMOUNT OF WARRANTS AND NOTES

ISSUED. (a) The governing body may not issue warrants or notes

under this subchapter in an amount exceeding 80 percent of the

difference between:

(1) the estimated revenue of the municipality for the fiscal

year; and

(2) the sum of:

(A) the interest on the bonded indebtedness of the municipality

to be paid from that revenue; and

(B) any amount that the municipality is required to pay from

that revenue into a sinking fund, special fund, or special trust

fund of the municipality.

(b) The limitation prescribed by Subsection (a) does not apply

to warrants or notes issued for refunding purposes.

under this subchapter and outstanding at any time in a fiscal

year may not exceed the greatest amount by which the proposed

expenditures for the fiscal year are estimated by the governing

body to exceed the estimated revenue available for payment of

warrants and notes during the fiscal year, as computed under

Subsection (a).

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1507.255. SALE OF WARRANTS OR NOTES. A municipality may

sell warrants or notes issued under this subchapter at a public

or private sale as provided in the ordinance authorizing the

issuance and sale of the warrants or notes.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

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