2023 Texas Statutes › Tax Code › Title 3 - Local Taxation › Subtitle B - Special Property Tax Provisions › Chapter 311 - Tax Increment Financing Act › Section 311.015. Tax Increment Bonds and Notes

Sec. 311.015.  TAX INCREMENT BONDS AND NOTES.  (a)  A municipality designating a reinvestment zone may issue tax increment bonds or notes, the proceeds of which may be used to make payments pursuant to agreements made under Section 311.010(b), to pay project costs for the reinvestment zone on behalf of which the bonds or notes were issued, or to satisfy claims of holders of the bonds or notes. The municipality may issue refunding bonds or notes for the payment or retirement of tax increment bonds or notes previously issued by it.
(b)  Tax increment bonds and notes are payable, as to both principal and interest, solely from the tax increment fund established for the reinvestment zone.  The governing body of the municipality may pledge irrevocably all or part of the fund for payment of tax increment bonds or notes.  The part of the fund pledged in payment may be used only for the payment of the bonds or notes or interest on the bonds or notes until the bonds or notes have been fully paid.  A holder of the bonds or notes or of coupons issued on the bonds has a lien against the fund for payment of the bonds or notes and interest on the bonds or notes and may protect or enforce the lien at law or in equity.
(c)  Tax increment bonds are issued by ordinance of the municipality without any additional approval other than that of the attorney general.
(d)  Tax increment bonds or notes, together with the interest on and income from those bonds or notes, are exempt from all taxes.
(e)  The issuing municipality may provide in the contract with the owners or holders of tax increment bonds that it will pay into the tax increment fund all or any part of the revenue produced or received from the operation or sale of a facility acquired, improved, or constructed pursuant to a project plan, to be used to pay principal and interest on the bonds.  If the municipality agrees, the owners or holders of tax increment bonds may have a lien or mortgage on a facility acquired, improved, or constructed with the proceeds of the bonds.
(f)  Tax increment bonds may be issued in one or more series.  The ordinance approving a tax increment bond or note, or the trust indenture or mortgage issued in connection with the bond or note, shall provide:
(1)  the date that the bond or note bears;
(2)  that the bond or note is payable on demand or at a specified time;
(3)  the interest rate that the bond or note bears;
(4)  the denomination of the bond or note;
(5)  whether the bond or note is in coupon or registered form;
(6)  the conversion or registration privileges of the bond or note;
(7)  the rank or priority of the bond or note;
(8)  the manner of execution of the bond or note;
(9)  the medium of payment in which and the place or places at which the bond or note is payable;
(10)  the terms of redemption, with or without premium, to which the bond or note is subject;
(11)  the manner in which the bond or note is secured;  and
(12)  any other characteristic of the bond or note.
(g)  A bond or note issued under this chapter is fully negotiable.  In a suit, action, or other proceeding involving the validity or enforceability of a bond or note issued under this chapter or the security of a bond or note issued under this chapter, if the bond or note recites in substance that it was issued by the municipality for a reinvestment zone, the bond or note is conclusively deemed to have been issued for that purpose, and the development or redevelopment of the zone is conclusively deemed to have been planned, located, and carried out as provided by this chapter.
(h)  A bank, trust company, savings bank or institution, savings and loan association, investment company or other person carrying on a banking or investment business;  an insurance company, insurance association, or other person carrying on an insurance business;  or an executor, administrator, curator, trustee, or other fiduciary may invest any sinking funds, money, or other funds belonging to it or in its control in tax increment bonds or notes issued under this chapter.  Tax increment bonds or notes are authorized security for all public deposits.  A person, political subdivision, or public or private officer may use funds owned or controlled by the person, political subdivision, or officer to purchase tax increment bonds or notes.  This chapter does not relieve any person of the duty to exercise reasonable care in selecting securities.
(i)  A tax increment bond or note is not a general obligation of the municipality issuing the bond or note.  A tax increment bond or note does not give rise to a charge against the general credit or taxing powers of the municipality and is not payable except as provided by this chapter.  A tax increment bond or note issued under this chapter must state the restrictions of this subsection on its face.
(i-1)  A municipality's obligation to deposit sales and use taxes into the tax increment fund is not a general obligation of the municipality.  An obligation to make payments from sales and use taxes under Section 311.0123 does not give rise to a charge against the general credit or taxing powers of the municipality and is not payable except as provided by this chapter.  A tax increment bond or note issued under this chapter that pledges payments made under Section 311.0123 must state the restrictions of this subsection on its face.
(j)  A tax increment bond or note may not be included in any computation of the debt of the issuing municipality.
(k)  A municipality may not issue tax increment bonds or notes in an amount that exceeds the total cost of implementing the project plan for the reinvestment zone for which the bonds or notes are issued.
(l)  A tax increment bond or note must mature on or before the date by which the final payments of tax increment into the tax increment fund are due.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
Amended by:
Acts 2005, 79th Leg., Ch. 114 (S.B. 1199), Sec. 2, eff. May 20, 2005.
Acts 2011, 82nd Leg., R.S., Ch. 1032 (H.B. 2853), Sec. 14, eff. June 17, 2011.