CHAPTER 1202. EXAMINATION AND REGISTRATION OF PUBLIC SECURITIES
GOVERNMENT CODE
TITLE 9. PUBLIC SECURITIES
SUBTITLE A. GENERAL PROVISIONS
CHAPTER 1202. EXAMINATION AND REGISTRATION OF PUBLIC SECURITIES
Sec. 1202.001. DEFINITIONS. In this chapter:
(1) "Issuance" means the initial delivery by an issuer of
evidence of an obligation of a public security issued by the
issuer to the initial purchaser in exchange for the purchase
price of the public security.
(2) "Issuer" means:
(A) an agency, authority, board, body politic, department,
district, instrumentality, municipal corporation, political
subdivision, public corporation, or subdivision of this state; or
(B) a nonprofit corporation acting for or on behalf of an entity
described by Paragraph (A).
(3) "Public security" means an instrument, including a bond,
note, certificate of obligation, certificate of participation or
other instrument evidencing a proportionate interest in payments
due to be paid by an issuer, or other type of obligation that:
(A) is issued or incurred by an issuer under the issuer's
borrowing power, without regard to whether it is subject to
annual appropriation; and
(B) is represented by an instrument issued in bearer or
registered form or is not represented by an instrument but the
transfer of which is registered on books maintained for that
purpose by or on behalf of the issuer.
(4) "Record of proceedings" means the record of an issuer's
proceedings relating to the authorization of a public security or
a credit agreement relating to a public security.
(5) "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 a public security, purchase or sale agreement,
interest rate swap agreement, or commitment or other agreement
authorized by an issuer in connection with the authorization,
issuance, sale, resale, security, exchange, payment, purchase,
remarketing, or redemption of a public security, interest on a
public security, or both.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
802, Sec. 1, eff. September 1, 2005.
Sec. 1202.002. AUTHORITY TO DEFINE TERMS. The attorney general
may determine, by application of accepted legal principles, the
meaning of a term used in this chapter, other than "issuance,"
"issuer," or "public security," and by rule define that term.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,
1999.
Sec. 1202.003. REVIEW AND APPROVAL OF PUBLIC SECURITIES. (a)
Before the issuance of a public security, the issuer shall submit
the public security and the record of proceedings to the attorney
general.
(b) If the attorney general finds that the public security has
been authorized to be issued in conformity with law, the attorney
general shall:
(1) approve the public security; and
(2) deliver to the comptroller:
(A) a copy of the attorney general's legal opinion stating that
approval; and
(B) the record of proceedings.
(c) Unless exempted by Section 1202.007, the issuance of a
public security except in compliance with this chapter is
prohibited.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,
1999.
Sec. 1202.004. FEE FOR EXAMINATION BY ATTORNEY GENERAL. (a)
When an issuer submits a record of proceedings to the attorney
general for examination and approval as provided by law, the
issuer shall pay a nonrefundable examination fee to the attorney
general in accordance with this section.
(b) If the issuer is issuing multiple series of a single public
security issue, the issuer shall pay the fee prescribed by this
section for each series.
(c) Except as provided by Subsection (d), the nonrefundable
examination fee required by this section is equal to the lesser
of:
(1) one-tenth of one percent of the principal amount of the
public security to which the record of proceedings relates; or
(2) $9,500.
(d) The minimum examination fee required by this section is
$750.
(e) The attorney general may adopt rules necessary to administer
this section.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
802, Sec. 2, eff. September 1, 2005.
Sec. 1202.005. REGISTRATION. On receipt of documents required
by Section 1202.003(b)(2) from the attorney general, the
comptroller shall register:
(1) the public security; and
(2) the record of proceedings.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,
1999.
Sec. 1202.006. VALIDITY AND INCONTESTABILITY. (a) A public
security and any contract the proceeds of which are pledged to
the payment of the public security are valid and incontestable in
a court or other forum and are binding obligations for all
purposes according to their terms:
(1) after the public security is approved by the attorney
general and registered by the comptroller; and
(2) on issuance of the public security.
(b) In any action brought to enforce the collection of county or
municipal bonds that are payable from ad valorem taxes and that
have been approved by the attorney general and registered by the
comptroller, the certificate of the attorney general shall be
admitted as evidence of the validity of the bonds and the
interest coupons pertaining to the bonds.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,
1999.
Sec. 1202.007. EXEMPTIONS; CONSTRUCTION OF EXEMPTIONS. (a) The
following are exempt from the approval and registration
requirements of this chapter:
(1) a public security that is:
(A) not subject to mandatory renewal or renewal at the option of
any person, including the issuer, a holder, or a bearer; and
(B) payable only out of:
(i) current revenues or taxes collected in the year the public
security is issued; or
(ii) the proceeds of other public securities;
(2) a certificate in evidence of benefit assessments;
(3) a certificate of obligation, including a claim or account
that represents an undivided interest in a certificate of
obligation, that under Subchapter C, Chapter 271, Local
Government Code, an issuer is authorized to deliver to a
contractor;
(4) a time warrant issued under Chapter 252 or 262, Local
Government Code;
(5) a public security authorized by Chapter 1371;
(6) a lease, lease-purchase, or installment sale obligation,
except as provided by other law; and
(7) a public security that by rule the attorney general exempts
because it is not practical to require approval before the public
security's issuance.
(b) The exemptions provided by Subsection (a) shall be narrowly
construed.
(c) An issuer that issues a public security that is exempt under
Subsection (a) may submit the public security to the attorney
general as provided by this chapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.002, eff.
Sept. 1, 2001.
Sec. 1202.008. COLLECTION AND REPORT OF INFORMATION ON PUBLIC
SECURITIES OF POLITICAL SUBDIVISIONS. (a) In reviewing public
securities under this chapter, the attorney general may collect,
in the form required by the Bond Review Board, information on
public securities issued by a municipal corporation or political
subdivision of this state.
(b) The information must include:
(1) the terms of the public securities;
(2) the debt service payable on the public securities; and
(3) other information required by the Bond Review Board.
(c) The attorney general shall send the information to the Bond
Review Board for inclusion in the board's report of debt
statistics under Section 1231.062.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,
1999.