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Texas Education Code - Section 43.010. Default Of School District Securities Held By The Permanent School Fund

Legal Research Home > Texas Lawyer > Education Code > Texas Education Code - Section 43.010. Default Of School District Securities Held By The Permanent School Fund

§ 43.010. DEFAULT OF SCHOOL DISTRICT SECURITIES HELD BY 
THE PERMANENT SCHOOL FUND.  (a) If interest or principal has not 
been paid for two years or more on any bonds issued by any school 
district and held by the permanent school fund, the State Board of 
Education may:
		(1)  compel the district to levy a tax sufficient to 
meet the interest and principal payments then or later due;  or
		(2)  if the district furnishes to the State Board of 
Education satisfactory proof that the district's taxing ability is 
insufficient, require the district to:
			(A)  exhaust all legal remedies in collecting 
delinquent taxes;  and       
			(B)  levy a tax at the maximum lawful rate on the 
bona fide valuation of taxable property located in the district.
	(b)  Revenue collected by either method specified by 
Subsection (a) shall be distributed proportionately to all owners 
of the defaulted securities in compliance with the following:
		(1)  the proportionate share for each owner is based on 
the interest and principal requirements of the original security 
before authorized refunding;  and
		(2)  prior acceptance of refunding securities does not 
reduce an owner's proportionate share.
	(c)  As long as any school district is delinquent in its 
payments of principal or interest on any of its bonds owned by the 
permanent school fund, the State Board of Education may specify the 
method of crediting payments to the state made by the district as to 
principal and interest.
	(d)  The comptroller may not issue any warrant from the 
foundation school fund to or for the benefit of any district that 
has been for as long as two years in default in the payment of 
principal or interest on any security owned by the permanent school 
fund until the State Board of Education certifies that the district 
has satisfactorily complied with the appropriate provisions of this 
section, in which event the comptroller shall resume making 
payments to or for the benefit of the district, including the making 
of pretermitted payments.

Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995.            

Last modified: August 10, 2007