Texas Education Code - Section 45.111. Certificates Of Indebtedness; Issuance By Certain School And Junior College Districts
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§ 45.111. CERTIFICATES OF INDEBTEDNESS; ISSUANCE BY
CERTAIN SCHOOL AND JUNIOR COLLEGE DISTRICTS. (a) Any school
district, including a junior college district, situated in a county
with a population of 200,000 or more may issue interest-bearing
certificates of indebtedness to provide funds for erecting or
equipping school buildings in the boundaries of the district or
refinancing outstanding certificates as provided by this section.
The term "certificates," as used in this section, includes all
obligations authorized to be issued under this section and the
interest on those obligations.
(b) The governing body of the district shall provide for the
payment of the certificates issued under this section by
appropriating and pledging local school funds derived from
maintenance taxes levied and assessed under Sections 45.002 and
130.122; Chapter 273, Acts of the 53rd Legislature, Regular
Session, 1953 (Article 2784g, Vernon's Texas Civil Statutes); or
other similar law that limits the amount of tax that may be levied
for maintenance purposes, as distinguished from bond requirements.
The appropriation and pledge may be in the nature of a continuing
irrevocable pledge to apply the first moneys collected annually
from the tax levy to the payment of the obligations or by the
irrevocable present levy and appropriation of the amount of the
maintenance tax required to meet the annual debt service
requirements of the obligations, in which event the governing body
shall covenant to annually set aside the amount in the annual tax
levy, showing the same is a portion of the maintenance tax. The
governing body shall annually budget the amount required to pay the
principal and interest of the obligations that may be scheduled to
become due in any fiscal year. This section may not be construed as
permitting the levy of a maintenance tax in excess of the amount
approved by the qualified voters of the district.
(c) A district may not at any one time have certificates
outstanding and unpaid in principal amount in excess of $250,000,
unless the excessive amount becomes the obligation of the district
by assumption under Subsection (k) or the new certificates are
being issued to refund or refinance outstanding obligations under
Subsection (i).
(d) The principal amount of certificates that may be
authorized at any one time and the scheduling of their principal
maturity are further restricted as follows:
(1) if the assessed valuation is more than $1 million
and less than $15 million, the limiting factor is 25 cents;
(2) if the assessed valuation is $15 million or more
but less than $35 million, the limiting factor is 15 cents; and
(3) if the assessed valuation is $35 million or more,
the limiting factor is 5 cents.
(e) Assessed valuation means the valuation for school
district purposes on the tax rolls of the district most recently
approved before the authorization of the certificates. The
limiting factor for a particular district, as prescribed by
Subsection (d), is multiplied by the assessed valuation of the
district, and the product is the maximum amount of debt service
requirements on the certificates that may be scheduled to become
due in any fiscal year on a cumulative basis. A district that has an
assessed valuation less than $1 million may not issue certificates
under this section.
(f) Certificates authorized to be issued under this section
shall be payable at the times and be in such form and denomination
or denominations either in coupon form or registered as to
principal, interest, or both. The certificates may contain options
for redemption before the scheduled maturity and may be payable at
the place and may contain other provisions as the governing body of
the district determines. A certificate may not mature over a period
in excess of 25 years from the date of the certificate or bear
interest at a rate in excess of seven percent per annum.
(g) Except if issued in exchange for certificates
outstanding as provided by Subsection (i), the certificates shall
be sold for cash at not less than the face or par value plus accrued
interest. The proceeds shall be applied for the purpose for which
the certificates were issued, except that all accrued interest and
premium received, if any, shall be deposited in the interest and
sinking fund established for the payment of the obligations. The
cost of issuing the obligations, including attorneys', printing,
and fiscal fees, may be paid from the proceeds, except if
certificates are sold under Subsection (i).
(h) The certificates, including interest whether issued in
coupon or registered form, are securities within the meaning of
Chapter 8, Business & Commerce Code, and that chapter applies to the
certificates after their approval by the attorney general and
registration by the comptroller.
(i) Each governing body may refund or refinance outstanding
certificates by issuing new interest-bearing certificates within
the limitations and conditions provided in this section. The new
certificates shall be issued and delivered in lieu of and on
surrender to the comptroller and the cancellation of the
obligations being refunded, and the comptroller shall register the
new certificates and deliver them in accordance with the order
authorizing their issuance. The new certificates may be issued in
accordance with Subchapter A, Chapter 1207, Government Code, and
delivered in accordance with Subchapter B or C of that chapter.
(j) A certified copy of all proceedings relating to the
authorization of the certificates shall be submitted to the
attorney general.
(k) Certificates issued under this section are an
indebtedness of the school district issuing them, but the holder of
a certificate does not have the right to demand payment out of any
fund other than those pledged to its payment. If the boundary lines
of any issuing district are changed while the certificates remain
outstanding, the indebtedness shall be adjusted or assumed as
provided under general law for the adjustment of bond indebtedness
payable from taxation.
(l) For purposes of this section, the governing body of a
common school district is the commissioners court of the county
having administrative jurisdiction. The governing body of an
independent school district, a rural high school district, or a
junior college district is its board of trustees, and the governing
body of a municipally controlled school district is the city or town
council or commission. Certificates shall be authorized by order
of the governing body of the district.
Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995.
Amended by Acts 2001, 77th Leg., ch. 1420, § 8.213, eff. Sept. 1,
2001.
Amendment by Acts 1973, 63rd Leg., p. 1776, ch. 651, § 1
Acts 1973, 63rd Leg., p. 1776, ch. 651, § 1, effective June 16,
1973, amends Vernon's Ann.Civ.St. art. 2784g-2, § 1 [now subsec.
(a) of this section] without reference to repeal of said article by
Acts 1973, 63rd Leg., p. 90, ch. 51, § 19, effective August 27,
1973. As so amended, § 1 of art. 2784g-2 reads:
"Any school district, including a junior college district, may
issue interest bearing Certificates of Indebtedness for the purpose
of (1) providing funds for the erection and equipment of school
buildings within the boundaries of the district, (2) refinancing
outstanding certificates as herein provided, or (3) purchasing
sites for the future construction of public school facilities. The
term certificates, as used in this Act, shall include all
obligations authorized to be issued hereunder and the term shall
include interest thereon, unless clearly indicated by the context
that another meaning is intended."
Section: 45.104 45.105 45.106 45.107 45.108 45.109 45.110 45.111 45.112 45.151 45.152 45.153 45.154 45.155 45.156
Last modified: August 10, 2007
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