Texas Education Code - Section 43.012. Refunding Other Defaulted Obligations
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§ 43.012. REFUNDING OTHER DEFAULTED OBLIGATIONS. (a)
Defaulted obligations, other than bonds of school districts as
provided by Section 43.011, due the available school fund may be
refinanced or refunded with the approval of the State Board of
Education in compliance with this section.
(b) In this section, "defaulted obligations" includes
delinquent interest whether represented by coupons or not, interest
on delinquent interest, and any other form of obligation due the
available school fund.
(c) The obligor must apply to the State Board of Education
and show:
(1) that the obligations due the available school fund
have been in default in whole or in part for a continuous period of
at least 15 years; and
(2) that the obligor is not in default in the payment
of the principal of any bonds owned by the permanent school fund.
(d) If the State Board of Education finds that the
requirements provided by Subsection (c) have been met, it may
approve a refinancing or the issuance of refunding bonds on the
conditions:
(1) that the refunding bonds must mature serially in
not exceeding 40 years from the date of issuance;
(2) that the principal amount of the refunding bonds
may be not less than the total amount of the obligations then in
default and due the available school fund; and
(3) that the refunding bonds must bear interest at a
rate or rates determined by the State Board of Education to be for
the best interest of the available school fund.
(e) The State Board of Education may accept refunding bonds
in lieu of either matured or unmatured bonds held for the benefit of
the permanent school fund if the rate of interest on the new
refunding bonds is at least the same rate as that of the bonds being
refunded.
(f) Refunding bonds issued with the approval or pursuant to
a refunding agreement with the State Board of Education in
compliance with either this section or Section 43.011 shall, on the
order of the State Board of Education, be exchanged by the
comptroller for the defaulted obligations they have been issued to
refund.
Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995.
Amended by Acts 1997, 75th Leg., ch. 1423, § 5.02, eff. Sept. 1,
1997.
Section: 43.004 43.005 43.006 43.007 43.009 43.010 43.011 43.012 43.013 43.014 43.015 43.016 43.017 43.018 43.019
Last modified: August 10, 2007
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