Texas Education Code - Section 45.004. Refunding Bonds
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§ 45.004. REFUNDING BONDS. (a) In this section:
(1) "Bond" includes a note or other evidence of
indebtedness.
(2) "Total debt service" means the amount of principal
and unpaid interest on a bond to final maturity.
(b) Each governing board or commissioners court described
by Section 45.001 may refund or refinance all or any part of any of
the district's outstanding bonds and matured or unmatured but
unpaid interest on those bonds payable from ad valorem taxes by
issuing refunding bonds payable from ad valorem taxes.
(c) A series or issue of refunding bonds may not be issued
unless:
(1) the total debt service on the refunding bonds will
amount to less than the total debt service on the bonds being
refunded;
(2) if a maximum interest rate was voted for the bonds
being refunded, the refunding bonds do not bear interest at a rate
higher than that maximum rate; and
(3) the refunding bonds are payable from taxes of the
same nature as those pledged to the payment of the obligations being
refunded.
(d) Refunding bonds may be made redeemable before maturity.
(e) The refunding bonds may be:
(1) issued and delivered in lieu of, and on surrender
to the comptroller and cancellation of, the obligations being
refunded, and the comptroller shall register the refunding bonds
and deliver them in accordance with the resolution or order
authorizing the refunding bonds; or
(2) sold for cash in any principal amounts necessary
to provide all or any part of the money required to:
(A) pay the principal of any bonds being refunded
and the interest to accrue on the bonds to maturity; or
(B) redeem any bonds being refunded before
maturity, including principal, any required redemption premium,
and the interest to accrue on the bonds to the redemption date.
(f) The refunding may be accomplished in one or in several
installment deliveries. Refunding bonds also may be issued and
delivered in accordance with any other applicable law.
(g) To refund bonds or to pay or redeem bonds in whole or in
part without issuing refunding bonds, the governing board or
commissioners court may deposit directly with the paying agent the
proceeds from the sale of refunding bonds or any other available
funds or resources. The deposit must be in an amount sufficient,
after taking into account both the principal and interest to accrue
on the assets of any escrow account created under Subsection (h), to
provide for the payment or redemption of the bonds and assumed
obligations that are to be refunded or to be paid or redeemed. The
deposit constitutes the making of firm banking and financial
arrangements for the discharge and final payment or redemption of
the bonds being refunded.
(h) The governing board or commissioners court may enter
into an escrow or a similar agreement with the paying agent with
respect to the safekeeping, investment, reinvestment,
administration, or disposition of the deposits, but the deposits
may be invested and reinvested only in direct obligations of the
United States, including obligations the principal of and interest
on which are unconditionally guaranteed by the United States and
that mature or bear interest payable at times and in amounts
sufficient to provide for the scheduled payment or redemption of
the bonds. The governing board or commissioners court shall enter
into an appropriate escrow or a similar agreement if any of the
bonds are scheduled to be paid or redeemed on a date later than the
next succeeding scheduled interest payment date.
(i) If the governing body or commissioners court has entered
into an escrow or a similar agreement under Subsection (h), the
refunded bonds are considered to be defeased and may not be included
in or considered to be an indebtedness of the district for the
purpose of a limitation on outstanding indebtedness or taxation or
for any other purpose.
(j) Refunding bonds may be issued under this section to
refund any bonds that are scheduled to mature or that are subject to
redemption before maturity, not more than 20 years from the date of
the refunding bonds. The refunding bonds may be sold at public or
private sale under the procedures, at the price, and on the terms
determined by the governing board or commissioners court. In
addition, the bonds may be sold bearing interest at the rate
determined by the governing board or commissioners court, but not
to exceed the maximum rate prescribed by Chapter 1204, Government
Code. The governing board or commissioners court may pledge to the
payment of any refunding bonds any surplus income to be available
from the investment or reinvestment of any deposit made as
authorized by this section or any other available revenues, income,
or resources.
(k) The refunding bonds may be issued in an additional
amount sufficient to pay the costs and expenses of issuing the bonds
and sufficient to fund any debt service reserve, contingency, or
other similar fund considered necessary or advisable by the
governing board or commissioners court.
Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995.
Amended by Acts 2001, 77th Leg., ch. 1420, § 8.208, eff. Sept. 1,
2001.
Section: 44.054 44.901 45.001 45.0011 45.002 45.003 45.0031 45.004 45.005 45.006 45.031 45.032 45.033 45.034 45.035
Last modified: August 10, 2007
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