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Texas Education Code - Section 45.103. Interest-Bearing Time Warrants

Legal Research Home > Texas Lawyer > Education Code > Texas Education Code - Section 45.103. Interest-Bearing Time Warrants

§ 45.103. INTEREST-BEARING TIME WARRANTS.  (a) Any school 
district in need of funds to construct, repair, or renovate school 
buildings, purchase school buildings and school equipment, or equip 
school properties with necessary heating, water, sanitation, 
lunchroom, or electric facilities or in need of funds with which to 
employ a person who has special skill and experience to compile 
taxation data and that is financially unable out of available funds 
to construct, repair, renovate, or purchase school buildings, 
purchase school equipment, or equip school properties with 
necessary heating, water, sanitation, lunchroom, or electric 
facilities or is unable to pay the person for compiling taxation 
data, may, subject to this section, issue interest-bearing time 
warrants, in amounts sufficient to construct, purchase, equip, or 
improve school buildings and facilities or to pay all or part of the 
compensation of the person to compile taxation data, any law to the 
contrary notwithstanding.  The warrants shall mature in serial 
installments of not more than five years from their date of issue.  
The warrants on maturity may be payable out of any available funds 
of the school district in the order of their maturity dates.  Any 
interest-bearing time warrants may be issued and sold by the 
district for not less than their face value, and the proceeds used 
to provide funds required for the purpose for which they are issued.  
The warrants shall be entitled to first payment out of any available 
funds of the district as they become due.  Included in the purposes 
for which interest-bearing time warrants may be issued is the 
payment of any amounts owed by the school district that was incurred 
in carrying out any of those purposes.
	(b)  Interest-bearing time warrants may not be issued or sold 
by a common school district or rural high school district until they 
are approved by the county board of school trustees.  The board 
shall, on application of the school district, inquire into the 
financial conditions and needs of the district, and may not approve 
the issuance of interest-bearing time warrants unless in its 
opinion the district:
		(1)  is in need of constructing, purchasing, repairing, 
or renovating a school building, obtaining the school equipment, or 
equipping school properties with necessary heating, water, 
sanitation, lunchroom, or electric facilities;  and
		(2)  will be able with the resources in prospect to 
liquidate the warrants at their maturity.
	(c)  A school district may not issue interest-bearing time 
warrants in excess of five percent of the assessed valuation of the 
district for the year in which the warrants are issued.  The payment 
of interest-bearing time warrants in any one year may not exceed the 
anticipated surplus income of the district for the year in which the 
warrants are issued, based on the budget of the district for that 
year.  The anticipated income computed under this section is 
exclusive of all bond taxes.  A school district may not have 
outstanding at any one time warrants totaling in excess of $500,000 
under this section.
	(d)  If interest-bearing time warrants issued under this 
section are outstanding, the officer in charge of the collection of 
delinquent taxes shall pay those collections to the legal 
depository of the district, to be deposited and held in a special 
fund for the payment of the interest-bearing time warrants, and 
except as otherwise provided by this section, collections of 
delinquent taxes may not be applied or used for any other purpose.
	(e)  Interest and penalties on delinquent taxes are 
considered a part of those taxes for purposes of this section.  If 
any delinquent taxes, including interest and penalties, are 
canceled, waived, released, or reduced either by the school 
district or in any other way, with or without its consent, the 
amount of the loss sustained shall be paid by the district to the 
special fund provided for by Subsection (d) out of funds not 
otherwise pledged to that special fund.
	(f)  All school districts issuing interest-bearing time 
warrants may encumber and mortgage any property purchased with the 
proceeds of the warrants or any property, including teachers' 
residences, owned by the district to secure the payment of legally 
incurred obligations, except that a lien may not be placed on any 
school building in which actual classroom instruction of students 
is conducted.
	(g)  In this section, "interest-bearing time warrant" 
includes a promissory note or other evidence of indebtedness issued 
under this section.
	(h)  Taxes levied to pay principal and interest of bonds that 
are delinquent are not included in the term "delinquent taxes" as 
used in this section.

Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1536, § 3, eff. June 19, 
1999.

Last modified: August 10, 2007