Sec. 1503.202. COMPETITIVE BIDS AND PAYMENT OR PERFORMANCE BONDS NOT REQUIRED. (a) A municipality that issues revenue bonds to finance the construction or acquisition of a building, improvement, or facility at an airport owned and operated by the municipality may spend all or part of the bond proceeds without inviting, advertising for, or otherwise requiring competitive bids for constructing or acquiring the building, improvement, or facility or requiring or obtaining payment bonds or performance bonds in connection with the construction or acquisition of the building, improvement, or facility if:
(1) the building, improvement, or facility is leased by the municipality to a private entity under a lease agreement under which the lessee is:
(A) obligated to maintain the building, improvement, or facility solely at the lessee's expense; and
(B) unconditionally obligated, for the term of the bonds, to make payments of net rent that are pledged to the payment of the bonds in an amount and at a time that is sufficient to provide for the timely payment of principal, interest, redemption premiums, and other expenses arising in connection with the payment of the bonds; and
(2) the bonds:
(A) provide by their terms that the bonds:
(i) are payable solely from net rent as prescribed by Subsection (a)(1)(B); and
(ii) may not be repaid under any circumstances from proceeds of a tax; and
(B) do not create or provide for the creation of a lien on real property owned by the municipality.
(b) This subchapter does not affect the obligation of a municipality to obtain competitive bids or require a payment bond or performance bond in connection with a contract for the construction of a building, improvement, or facility if the contract is awarded by the municipality.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1, 1999.
Section: Previous 1503.104 1503.105 1503.106 1503.107 1503.108 1503.109 1503.110 1503.151 1503.152 1503.153 1503.154 1503.155 1503.156 1503.201 1503.202Last modified: September 28, 2016