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.
(c) The municipality shall send to the comptroller a certified
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.
(c) The municipality shall send to the comptroller a certified
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.
(c) A municipality may reserve any claim the municipality may
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.
(c) The aggregate principal amount of warrants or notes issued
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.