TX Educ Code § 45.004 (2021)
2021 Texas Statutes|Education Code|Title 2 - Public Education|Subtitle I - School Finance and Fiscal Management|Chapter 45 - School District Funds|Subchapter A. Tax Bonds and Maintenance Taxes|Section 45.004. Refunding Bonds

Sec. 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, Sec. 1, eff. May 30, 1995.  Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.208, eff. Sept. 1, 2001.|