CHAPTER 320. PARK BOARD AND PARK BONDS: COUNTIES WITH POPULATION OF 5,000 OR MORE
LOCAL GOVERNMENT CODE
TITLE 10. PARKS AND OTHER RECREATIONAL AND CULTURAL RESOURCES
SUBTITLE B. COUNTY PARKS AND OTHER RECREATIONAL AND CULTURAL
RESOURCES
CHAPTER 320. PARK BOARD AND PARK BONDS: COUNTIES WITH POPULATION
OF 5,000 OR MORE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 320.001. ELIGIBLE COUNTIES. The commissioners court of a
county with a population of 5,000 or more by order may adopt this
chapter for the purpose of acquiring, improving, equipping,
maintaining, financing, and operating one or more public parks.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.002. DEFINITION. In this chapter, "board" means the
board of park commissioners.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.003. CREATION OF PARKS BOARD. (a) The order adopting
this chapter must specify whether the powers and duties provided
by this chapter will be exercised and performed by the
commissioners court or by a board of park commissioners to be
created for that purpose.
(b) If a board is created, the commissioners court shall
transfer to the board jurisdiction and control of the parks with
respect to which the commissioners court adopted this chapter.
(c) The commissioners court may from time to time adopt this
chapter with respect to one or more other parks and may appoint
another board for those parks.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.004. EXERCISE OF POWERS BY COMMISSIONERS COURT. (a)
If a board is not created, the commissioners court shall exercise
the powers and perform the duties of the board, and references in
this chapter to the board are considered to be references to the
commissioners court.
(b) If creation of a board is declared by a court to be invalid,
the commissioners court shall exercise the powers and perform the
duties of the board under this chapter, and the prior acts of the
board are considered to have been acts of the commissioners
court.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
SUBCHAPTER B. BOARD OF PARK COMMISSIONERS
Sec. 320.021. COMPOSITION; TERM; QUALIFICATIONS. (a) The board
must be composed of seven members appointed by the commissioners
court.
(b) Members of the board serve for terms of two years, with the
terms of three or four members expiring February 1 of each year.
In appointing the initial board, the commissioners court shall
designate three members to serve for a term expiring February 1
following their appointment and four members to serve for a term
expiring the next February 1. The commissioners court shall make
the necessary appointments each January.
(c) A park commissioner must be a qualified voter of the county.
A park commissioner may not be an officer or employee of the
county or of a municipality in the county.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.022. VACANCY. A vacancy on the board shall be filled
by appointment of the commissioners court for the unexpired term.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.023. OATH; BOND. (a) Within 15 days after the date a
park commissioner is appointed, the commissioner must qualify by
taking the official oath and by filing a good and sufficient bond
with the county clerk.
(b) The bond must be:
(1) payable to the county judge;
(2) in an amount prescribed by the commissioners court of $5,000
or more; and
(3) conditioned that the commissioner will faithfully perform
the duties of park commissioner, including the proper handling of
all money that comes into the hands of the commissioner in the
commissioner's capacity as park commissioner.
(c) The board shall pay the cost of the bond.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.024. CERTIFICATE OF APPOINTMENT. A certificate of
appointment executed by the county judge and attested by the
county clerk shall be filed in the office of the county clerk.
The certificate is conclusive evidence of the proper appointment
of the park commissioner.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.025. ORGANIZATION; MEETINGS. (a) The board shall
elect from its membership a chairman, vice-chairman, secretary,
and treasurer, except that the first chairman of the board shall
be designated by the commissioners court at the time of
appointment of the first board. The member designated as the
first chairman serves in that capacity until the expiration of
the term to which the member was appointed or until the member
vacates office during that term.
(b) The offices of secretary and treasurer may be held by the
same person. If either the secretary or treasurer is absent or
unavailable, the other may act for and perform the duties of the
absent or unavailable officer.
(c) The board shall hold regular meetings at times to be fixed
by the board and may hold special meetings as necessary.
(d) The board may act on the vote of a majority of a quorum.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.026. EXPENSES. A park commissioner is entitled to
compensation for all necessary expenses, including travel
expenses, incurred in the performance of park commissioner
duties.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.027. CONFLICT OF INTEREST. (a) A park commissioner or
employee of the board may not acquire a direct or indirect
pecuniary interest in any improvements, concessions, equipment,
or business located in or related to a public park administered
by the board.
(b) A park commissioner may not have a direct or indirect
interest in a contract or proposed contract for construction,
materials, or services in connection with or related to a park
administered by the board.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.028. SEAL. The board shall adopt a seal, and the seal
shall be placed on each lease, deed, or other instrument usually
executed under seal and on any other instrument as required by
the board.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
SUBCHAPTER C. POWERS AND DUTIES
Sec. 320.041. OPERATION AND MAINTENANCE OF PARKS. (a) Subject
to the supervision of the commissioners court, the board shall
maintain and operate the parks under its administration.
(b) The commissioners court may transfer to a previously created
board jurisdiction and control of one or more additional parks if
the transfer will not impair the contract rights of the holders
of any outstanding revenue bonds.
(c) The board shall exercise its powers and perform its duties
in respect to the additional parks in a manner that will not
infringe on the rights of the holders of outstanding revenue
bonds. The board may not operate or maintain the additional parks
in a manner that will compete with or reduce the revenues of park
properties or facilities the income of which has been pledged to
the payment of outstanding revenue bonds.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.042. PERSONNEL. (a) The board may employ permanent or
temporary personnel, including secretaries, stenographers,
bookkeepers, accountants, technical experts, and other agents.
(b) The board shall determine the qualifications, duties, and
compensation of employees.
(c) The board may employ a manager for one or more parks. The
board may give the manager full authority for the management and
operation of parks, subject to the direction and orders of the
board and the commissioners court.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.043. DEPOSITORIES AND DISBURSEMENTS; AUDITS. (a) The
commissioners court shall select one or more depositories for
funds belonging to or under the control of the board other than
bond proceeds or revenues and funds pledged to the payment of
revenue bonds. The commissioners court shall select the
depositories on the basis of competitive bids substantially in
the manner provided by law for county funds. The deposits must be
secured substantially in the manner and amount prescribed by law
for county funds.
(b) The county auditor shall maintain a current audit of the
board's funds and shall prepare monthly and annual audit reports.
The reports shall be filed with the commissioners court and with
the board and must be available for public inspection at all
reasonable times during office hours on business days.
(c) A warrant or check for the withdrawal of board funds must be
signed by an officer of the board or, if designated by an order
or resolution of the board, by a bonded employee of the board,
and must be countersigned by the county auditor.
(d) The board may disburse funds under its control for any
lawful purpose for the benefit of a park under its control.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.044. CONTRACTS. (a) The board may enter a contract,
including a lease or other agreement, with any person as the
board considers necessary or convenient to carry out the purposes
and powers granted by this chapter, including a contract
connected with, incident to, or affecting the acquisition,
financing, construction, equipment, maintenance, or operation of
a facility located or to be located in or pertaining to a park
under its control.
(b) A contract may be on terms and conditions and for the length
of time as agreed to by the board.
(c) To be effective, a contract must be:
(1) authorized by order or resolution of the board;
(2) executed by the board chairman or vice-chairman;
(3) attested by the secretary or treasurer; and
(4) approved by the commissioners court.
(d) A contract is binding on the board and the county without
reference to any other law.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.045. RULES. Subject to the approval of the
commissioners court, the board may adopt reasonable rules
concerning the use of any park administered by the board.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.0455. RULES IN A POPULOUS COUNTY; PENALTY FOR
VIOLATIONS. (a) This section applies to a county with a
population of 2.8 million or more.
(b) Subject to the approval of the commissioners court, the
board may adopt reasonable rules concerning the use of any park
administered by the board.
(c) A person commits an offense if the person violates a rule
approved by the commissioners court under Subsection (b). An
offense under this subsection is a Class C misdemeanor.
(d) Fines collected under Subsection (c) shall be deposited in
the county's general fund.
Added by Acts 1999, 76th Leg., ch. 1059, Sec. 1, eff. Sept. 1,
1999.
Sec. 320.046. GRANTS. The board may accept grants and
gratuities in any form and from any source approved by the board
and the commissioners court, including the government of the
United States, this state, a public or private corporation, or
any other person, for the benefit of one or more parks
administered by the board or for the use of the board with
respect to one or more of those parks.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.047. FINANCIAL STATEMENT; BUDGET. (a) On or
immediately after January 1 of each year, the board shall prepare
and file with the commissioners court a complete financial
statement showing the financial status of the board and the
properties, funds, and indebtedness under the administration of
the board.
(b) The financial statement must show separately all information
concerning:
(1) revenue bonds;
(2) the gross revenues from properties or facilities the net
revenues of which are pledged to the payment of the revenue bonds
and the expenditures from those gross revenues; and
(3) money appropriated by the county for operation and
maintenance expenses.
(c) At the same time the financial statement is filed with the
commissioners court, the board shall file with the county
auditor:
(1) a copy of the financial statement; and
(2) a proposed budget for the board's needs for the current
calendar year.
(d) In counties subject to Subchapter B, Chapter 111, the county
auditor shall include the proposed budget as part of the county
budget prepared and submitted to the commissioners court.
(e) The board shall operate the properties and facilities the
net revenues of which are pledged to the payment of revenue bonds
in a manner that will produce gross revenues sufficient to pay
the operation and maintenance expenses and all payments required
under the bond order, so that it is unnecessary to appropriate
tax money for the operation and maintenance or for the revenue
bond payments.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.048. SUITS; LEGAL SERVICES. (a) The board may sue and
be sued in its own name.
(b) The county attorney shall perform all necessary legal
services for the board.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.049. RECORDS. The board shall keep a complete account
of each board meeting and proceeding and shall maintain the
records of the board in a secure manner. The records are the
property of the board and are subject to inspection by the
commissioners court and other county officers at all reasonable
times during office hours on business days. The preservation,
microfilming, destruction, or other disposition of the records of
the board is subject to the requirements of Subtitle C, Title 6,
Local Government Code, and rules adopted under that subtitle.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1248, Sec. 61, eff. Sept. 1,
1989.
Sec. 320.050. SUPERVISION BY COMMISSIONERS COURT. (a)
Notwithstanding any other provision of this chapter, the board is
subject to the supervision of the commissioners court in the
exercise of all rights, powers, and privileges and in the
performance of all duties.
(b) The commissioners court must approve all contracts, leases,
deeds, and other agreements made or granted by the board. An
appropriate entry in the minutes of the commissioners court is
sufficient evidence of approval.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
SUBCHAPTER D. REVENUE BONDS
Sec. 320.071. ISSUANCE; PURPOSE. (a) For the purpose of
providing funds to acquire, improve, equip, and repair any park
administered by the board, or for the acquisition by construction
or otherwise of any facilities to be used in or connected with or
incident to such a park, the county may from time to time issue
revenue bonds.
(b) The bonds are fully negotiable instruments under Chapter 3,
Business & Commerce Code, and other laws of this state.
(c) Included among the properties, improvements, and facilities
that may be acquired through the issuance of bonds are stadiums,
coliseums, auditoriums, athletic fields, pavilions, and buildings
and grounds for assembly, including parking facilities or other
improvements incident to those facilities.
(d) The bonds must be authorized by an order adopted by the
commissioners court.
(e) The bonds must be issued in the name of the county, signed
by the county judge, attested by the county clerk, and impressed
with the seal of the commissioners court. The signature of the
county judge or the signature of the county clerk may be a
facsimile signature, and the seal of the commissioners court may
be a facsimile seal, as provided in the bond order. The interest
coupons attached to the bonds may also be executed by facsimile
signatures of officers. A facsimile signature or facsimile seal
may be lithographed, engraved, or printed.
(f) Revenue bonds must mature serially or otherwise in not more
than 40 years from their date or dates and may be sold by the
commissioners court at a price and under terms determined by the
court to be the most advantageous reasonably obtainable. The net
effective interest rate may not exceed the maximum rate provided
by Chapter 1204, Government Code.
(g) The bond order shall prescribe the details as to the bonds.
It may contain provisions for the calling of the bonds for
redemption before the respective maturity dates at particular
prices and times. Except for rights of redemption expressly
reserved in the bond order and in the bonds, the bonds are not
subject to redemption before their scheduled maturity date or
dates without the consent of the holder or holders.
(h) The bonds may be made payable at times and places in or
outside this state, as prescribed in the bond order. The bonds
may be nonregistrable or may be made registrable as to principal,
or both principal and interest, as provided in the bond order.
(i) The bonds may be issued in one or more installments and in
one or more series.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.317, eff. Sept.
1, 2001.
Sec. 320.072. ELECTION. (a) Revenue bonds may not be issued
unless authorized by a majority vote of the qualified voters of
the county voting at an election ordered for that purpose by the
commissioners court.
(b) The election shall be ordered and held, and notice of the
election shall be given, as provided by Chapter 1251, Government
Code, except that the ballot shall be printed to provide for
voting for or against the proposition: "The issuance of
$___________ in park revenue bonds payable solely from revenues."
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.318, eff. Sept.
1, 2001.
Sec. 320.073. PLEDGE OF REVENUES. (a) Revenue bonds may be
secured by a pledge of all or part of the net revenues from the
operation of the parks or from the properties or facilities. The
net revenues of any one or more contracts, operation contracts,
leases, or agreements may be pledged as the sole or as additional
security for the support of the bonds.
(b) Any revenue other than tax revenues, as specified in the
bond order, may be pledged for the support of the bonds.
(c) In the bond order, the county may reserve the right to issue
additional revenue bonds that will be on a parity with, or
subordinate to, the revenue bonds then being issued.
(d) While any of the revenue bonds are outstanding, other
obligations may not be issued against the pledged revenues except
to the extent and in the manner expressly permitted in the bond
order.
(e) In this subchapter, "net revenues" means the gross revenues
from the operation of those properties and facilities of the
parks, the net revenues of which properties and facilities are
pledged for the support of the bonds, after deduction of the
necessary and reasonable expenses of operation and maintenance of
the properties and facilities.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.074. PROCEEDS. (a) The proceeds of the bonds shall be
used under the restrictions provided in the bond order or in any
separate escrow agreement, or both. The holders of the bonds and
any trustee provided for in respect to the bonds have a lien on
the proceeds until so applied.
(b) From the bond proceeds, there may be set aside:
(1) an amount for payment of interest on the bonds during
construction and any additional period prescribed in the bond
order; and
(2) an amount for the interest and sinking fund or for one or
more separate reserve funds, as prescribed in the bond order, for
the benefit of payment of the bonds.
(c) Proceeds remaining after the amounts are set aside under
Subsection (b) shall be used for the payment of all expenses
necessarily incurred in the sale, issuance, and delivery of the
bonds and then for the purposes specified in the bond order and
in the bonds.
(d) Any surplus remaining after accomplishment of the bond
purposes shall be used for retiring the bonds to the extent that
they can be purchased at prevailing market prices, with any
remainder being deposited to the credit of the interest and
sinking fund.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.075. APPROVAL AND REGISTRATION. (a) After any bonds
have been authorized by the commissioners court, the bonds and
the records relating to their issuance shall be submitted to the
attorney general for examination and approval. The attorney
general shall approve the bonds if issued in accordance with this
subchapter.
(b) After the bonds have been approved by the attorney general,
they shall be registered by the comptroller of public accounts.
(c) When the bonds have been approved by the attorney general,
registered by the comptroller, and delivered to the purchasers,
they are incontestable.
(d) If the bonds recite that they are secured partially or
otherwise by a pledge of the proceeds of or income from any
contract, including a lease or other agreement, a copy of the
contract and of the records of the proceedings authorizing the
contract may be submitted to the attorney general with the bond
record. In that event, the approval of the bonds by the attorney
general constitutes an approval of the contract, and the contract
is incontestable except for forgery or fraud.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.076. FEES AND REVENUE. (a) In this section, "fee"
includes any fee, charge, or toll.
(b) The necessary and reasonable expenses of operation and
maintenance of the properties and facilities whose revenues are
pledged to the payment of the revenue bonds are a first lien on
and charge against the income of the properties and facilities.
While any of the bonds or interest remains outstanding, the board
shall charge and require the payment of fees for the use of the
properties and facilities. The board shall determine the rates of
fees charged by it for the use, operation, or lease of the
properties and facilities. Fees must be equal and uniform within
classes and must be in amounts that yield revenues at all times
at least sufficient to pay the expenses of operation and
maintenance, and to provide for the payments prescribed in the
bond order for the establishment and maintenance of the funds
provided for in the bond order, including the interest and
sinking fund and each reserve fund. The bond order may make
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.
(c) The commissioners court shall ensure that the fees charged
by the board are sufficient to comply with this subchapter. If
for any reason the fees are not sufficient, the commissioners
court shall impose additional fees so that the revenue will be
sufficient.
(d) If any part of the security for the bonds consists of money
to be received by the board as consideration for properties or
facilities belonging to the county but operated by a person other
than the board under a lease or operating contract, the board
shall fix and authorize fees to be charged by the person for
services rendered by the properties or facilities. The fees must
be in amounts at least sufficient to assure receipt by the board
of money that the board is committed to pay from that source for
the benefit of the revenue bonds under the bond order.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.077. REFUNDING BONDS. (a) The commissioners court may
issue fully negotiable revenue bonds for the purpose of refunding
bonds issued under this subchapter. An election is not necessary
for the issuance of refunding bonds.
(b) The refunding bonds may be secured in the manner provided by
this subchapter for securing original revenue bonds.
(c) Refunding bonds may be issued to refund bonds of more than
one series or issue of outstanding revenue bonds and may combine
pledges for the outstanding bonds for the security of the
refunding bonds. Refunding bonds may be secured by other and
additional revenues if the refunding bonds will not impair the
contract rights of the holders or any of the outstanding bonds
that are not to be refunded.
(d) Refunding bonds must be authorized by order of the
commissioners court and shall be executed and mature as provided
by this subchapter for original bonds.
(e) Refunding bonds must bear interest at the same or lower rate
than that of the bonds refunded unless it is shown mathematically
that a saving will result in the total amount of interest to be
paid.
(f) Refunding bonds shall be approved by the attorney general as
in the case of original bonds and shall be registered by the
comptroller of public accounts on surrender and cancellation of
the bonds to be refunded, unless the order authorizing issuance
provides that the bonds are to be sold and the proceeds deposited
in the place or places where the original bonds are payable. In
that case, the refunding bonds may be issued in an amount
sufficient to pay the interest on the original bonds to their
option or maturity date, and the comptroller shall register them
without the surrender and cancellation of the original bonds.
(g) Refunding bonds, after they have been approved by the
attorney general and registered by the comptroller, are
incontestable.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 320.078. BONDS NOT STATE OR COUNTY DEBT. (a) The revenue
bonds are not a debt of the county or of the state but are
payable solely from the revenues pledged to their payment.
(b) The principal of or interest on revenue bonds or any
refunding bonds is not a debt against the tax revenues of the
county but is solely a charge on the pledged revenues.
(c) The revenue bonds or refunding bonds may not be considered
in determining the power of the county to incur obligations
payable from taxation.
(d) Each bond must contain on its face substantially the
following provision: "The holder hereof shall never have the
right to demand payment of his obligation out of any funds raised
or to be raised by taxation."
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 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,
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.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.