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Texas Government Code - GOV'T § 1505.057. Encumbrance as Additional Security

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) As additional security for the payment of the principal of and interest on bonds issued under this subchapter, a municipality may encumber any part or all of a project undertaken with funds derived from the bonds.

(b) An encumbrance entered into under this section:

(1) may provide for a grant, to a purchaser under sale or foreclosure, of a franchise to operate the encumbered project for a term not to exceed 20 years from the date of purchase, subject to all laws regulating the same then in force;  and

(2) shall:

(A) provide for a trustee to enforce foreclosure;  and

(B) provide the municipality with the option at any five-year period within the 20-year term after purchase to repurchase a project, other than reclaimed land acquired by an individual purchaser, under reasonable terms and at a reasonable price stated in the encumbrance.

(c) Subject to Section 1505.076, the governing body of the municipality shall manage and control a project while it is encumbered under this section.

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Cite this article: FindLaw.com - Texas Government Code - GOV'T § 1505.057. Encumbrance as Additional Security - last updated January 01, 2024 | https://codes.findlaw.com/tx/government-code/gov-t-sect-1505-057/

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