2009 Texas Code
LOCAL GOVERNMENT CODE
TITLE 10. PARKS AND OTHER RECREATIONAL AND CULTURAL RESOURCES
CHAPTER 320. PARK BOARD AND PARK BONDS: COUNTIES WITH POPULATION OF 5,000 OR MORE  

LOCAL GOVERNMENT CODE

TITLE 10. PARKS AND OTHER RECREATIONAL AND CULTURAL RESOURCES

SUBTITLE B. COUNTY PARKS AND OTHER RECREATIONAL AND CULTURAL

RESOURCES

CHAPTER 320. PARK BOARD AND PARK BONDS: COUNTIES WITH POPULATION

OF 5,000 OR MORE

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 320.001. ELIGIBLE COUNTIES. The commissioners court of a

county with a population of 5,000 or more by order may adopt this

chapter for the purpose of acquiring, improving, equipping,

maintaining, financing, and operating one or more public parks.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.002. DEFINITION. In this chapter, "board" means the

board of park commissioners.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.003. CREATION OF PARKS BOARD. (a) The order adopting

this chapter must specify whether the powers and duties provided

by this chapter will be exercised and performed by the

commissioners court or by a board of park commissioners to be

created for that purpose.

(b) If a board is created, the commissioners court shall

transfer to the board jurisdiction and control of the parks with

respect to which the commissioners court adopted this chapter.

(c) The commissioners court may from time to time adopt this

chapter with respect to one or more other parks and may appoint

another board for those parks.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.004. EXERCISE OF POWERS BY COMMISSIONERS COURT. (a)

If a board is not created, the commissioners court shall exercise

the powers and perform the duties of the board, and references in

this chapter to the board are considered to be references to the

commissioners court.

(b) If creation of a board is declared by a court to be invalid,

the commissioners court shall exercise the powers and perform the

duties of the board under this chapter, and the prior acts of the

board are considered to have been acts of the commissioners

court.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

SUBCHAPTER B. BOARD OF PARK COMMISSIONERS

Sec. 320.021. COMPOSITION; TERM; QUALIFICATIONS. (a) The board

must be composed of seven members appointed by the commissioners

court.

(b) Members of the board serve for terms of two years, with the

terms of three or four members expiring February 1 of each year.

In appointing the initial board, the commissioners court shall

designate three members to serve for a term expiring February 1

following their appointment and four members to serve for a term

expiring the next February 1. The commissioners court shall make

the necessary appointments each January.

(c) A park commissioner must be a qualified voter of the county.

A park commissioner may not be an officer or employee of the

county or of a municipality in the county.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.022. VACANCY. A vacancy on the board shall be filled

by appointment of the commissioners court for the unexpired term.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.023. OATH; BOND. (a) Within 15 days after the date a

park commissioner is appointed, the commissioner must qualify by

taking the official oath and by filing a good and sufficient bond

with the county clerk.

(b) The bond must be:

(1) payable to the county judge;

(2) in an amount prescribed by the commissioners court of $5,000

or more; and

(3) conditioned that the commissioner will faithfully perform

the duties of park commissioner, including the proper handling of

all money that comes into the hands of the commissioner in the

commissioner's capacity as park commissioner.

(c) The board shall pay the cost of the bond.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.024. CERTIFICATE OF APPOINTMENT. A certificate of

appointment executed by the county judge and attested by the

county clerk shall be filed in the office of the county clerk.

The certificate is conclusive evidence of the proper appointment

of the park commissioner.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.025. ORGANIZATION; MEETINGS. (a) The board shall

elect from its membership a chairman, vice-chairman, secretary,

and treasurer, except that the first chairman of the board shall

be designated by the commissioners court at the time of

appointment of the first board. The member designated as the

first chairman serves in that capacity until the expiration of

the term to which the member was appointed or until the member

vacates office during that term.

(b) The offices of secretary and treasurer may be held by the

same person. If either the secretary or treasurer is absent or

unavailable, the other may act for and perform the duties of the

absent or unavailable officer.

(c) The board shall hold regular meetings at times to be fixed

by the board and may hold special meetings as necessary.

(d) The board may act on the vote of a majority of a quorum.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.026. EXPENSES. A park commissioner is entitled to

compensation for all necessary expenses, including travel

expenses, incurred in the performance of park commissioner

duties.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.027. CONFLICT OF INTEREST. (a) A park commissioner or

employee of the board may not acquire a direct or indirect

pecuniary interest in any improvements, concessions, equipment,

or business located in or related to a public park administered

by the board.

(b) A park commissioner may not have a direct or indirect

interest in a contract or proposed contract for construction,

materials, or services in connection with or related to a park

administered by the board.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.028. SEAL. The board shall adopt a seal, and the seal

shall be placed on each lease, deed, or other instrument usually

executed under seal and on any other instrument as required by

the board.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

SUBCHAPTER C. POWERS AND DUTIES

Sec. 320.041. OPERATION AND MAINTENANCE OF PARKS. (a) Subject

to the supervision of the commissioners court, the board shall

maintain and operate the parks under its administration.

(b) The commissioners court may transfer to a previously created

board jurisdiction and control of one or more additional parks if

the transfer will not impair the contract rights of the holders

of any outstanding revenue bonds.

(c) The board shall exercise its powers and perform its duties

in respect to the additional parks in a manner that will not

infringe on the rights of the holders of outstanding revenue

bonds. The board may not operate or maintain the additional parks

in a manner that will compete with or reduce the revenues of park

properties or facilities the income of which has been pledged to

the payment of outstanding revenue bonds.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.042. PERSONNEL. (a) The board may employ permanent or

temporary personnel, including secretaries, stenographers,

bookkeepers, accountants, technical experts, and other agents.

(b) The board shall determine the qualifications, duties, and

compensation of employees.

(c) The board may employ a manager for one or more parks. The

board may give the manager full authority for the management and

operation of parks, subject to the direction and orders of the

board and the commissioners court.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.043. DEPOSITORIES AND DISBURSEMENTS; AUDITS. (a) The

commissioners court shall select one or more depositories for

funds belonging to or under the control of the board other than

bond proceeds or revenues and funds pledged to the payment of

revenue bonds. The commissioners court shall select the

depositories on the basis of competitive bids substantially in

the manner provided by law for county funds. The deposits must be

secured substantially in the manner and amount prescribed by law

for county funds.

(b) The county auditor shall maintain a current audit of the

board's funds and shall prepare monthly and annual audit reports.

The reports shall be filed with the commissioners court and with

the board and must be available for public inspection at all

reasonable times during office hours on business days.

(c) A warrant or check for the withdrawal of board funds must be

signed by an officer of the board or, if designated by an order

or resolution of the board, by a bonded employee of the board,

and must be countersigned by the county auditor.

(d) The board may disburse funds under its control for any

lawful purpose for the benefit of a park under its control.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.044. CONTRACTS. (a) The board may enter a contract,

including a lease or other agreement, with any person as the

board considers necessary or convenient to carry out the purposes

and powers granted by this chapter, including a contract

connected with, incident to, or affecting the acquisition,

financing, construction, equipment, maintenance, or operation of

a facility located or to be located in or pertaining to a park

under its control.

(b) A contract may be on terms and conditions and for the length

of time as agreed to by the board.

(c) To be effective, a contract must be:

(1) authorized by order or resolution of the board;

(2) executed by the board chairman or vice-chairman;

(3) attested by the secretary or treasurer; and

(4) approved by the commissioners court.

(d) A contract is binding on the board and the county without

reference to any other law.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.045. RULES. Subject to the approval of the

commissioners court, the board may adopt reasonable rules

concerning the use of any park administered by the board.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.0455. RULES IN A POPULOUS COUNTY; PENALTY FOR

VIOLATIONS. (a) This section applies to a county with a

population of 2.8 million or more.

(b) Subject to the approval of the commissioners court, the

board may adopt reasonable rules concerning the use of any park

administered by the board.

(c) A person commits an offense if the person violates a rule

approved by the commissioners court under Subsection (b). An

offense under this subsection is a Class C misdemeanor.

(d) Fines collected under Subsection (c) shall be deposited in

the county's general fund.

Added by Acts 1999, 76th Leg., ch. 1059, Sec. 1, eff. Sept. 1,

1999.

Sec. 320.046. GRANTS. The board may accept grants and

gratuities in any form and from any source approved by the board

and the commissioners court, including the government of the

United States, this state, a public or private corporation, or

any other person, for the benefit of one or more parks

administered by the board or for the use of the board with

respect to one or more of those parks.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.047. FINANCIAL STATEMENT; BUDGET. (a) On or

immediately after January 1 of each year, the board shall prepare

and file with the commissioners court a complete financial

statement showing the financial status of the board and the

properties, funds, and indebtedness under the administration of

the board.

(b) The financial statement must show separately all information

concerning:

(1) revenue bonds;

(2) the gross revenues from properties or facilities the net

revenues of which are pledged to the payment of the revenue bonds

and the expenditures from those gross revenues; and

(3) money appropriated by the county for operation and

maintenance expenses.

(c) At the same time the financial statement is filed with the

commissioners court, the board shall file with the county

auditor:

(1) a copy of the financial statement; and

(2) a proposed budget for the board's needs for the current

calendar year.

(d) In counties subject to Subchapter B, Chapter 111, the county

auditor shall include the proposed budget as part of the county

budget prepared and submitted to the commissioners court.

(e) The board shall operate the properties and facilities the

net revenues of which are pledged to the payment of revenue bonds

in a manner that will produce gross revenues sufficient to pay

the operation and maintenance expenses and all payments required

under the bond order, so that it is unnecessary to appropriate

tax money for the operation and maintenance or for the revenue

bond payments.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.048. SUITS; LEGAL SERVICES. (a) The board may sue and

be sued in its own name.

(b) The county attorney shall perform all necessary legal

services for the board.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.049. RECORDS. The board shall keep a complete account

of each board meeting and proceeding and shall maintain the

records of the board in a secure manner. The records are the

property of the board and are subject to inspection by the

commissioners court and other county officers at all reasonable

times during office hours on business days. The preservation,

microfilming, destruction, or other disposition of the records of

the board is subject to the requirements of Subtitle C, Title 6,

Local Government Code, and rules adopted under that subtitle.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1989, 71st Leg., ch. 1248, Sec. 61, eff. Sept. 1,

1989.

Sec. 320.050. SUPERVISION BY COMMISSIONERS COURT. (a)

Notwithstanding any other provision of this chapter, the board is

subject to the supervision of the commissioners court in the

exercise of all rights, powers, and privileges and in the

performance of all duties.

(b) The commissioners court must approve all contracts, leases,

deeds, and other agreements made or granted by the board. An

appropriate entry in the minutes of the commissioners court is

sufficient evidence of approval.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

SUBCHAPTER D. REVENUE BONDS

Sec. 320.071. ISSUANCE; PURPOSE. (a) For the purpose of

providing funds to acquire, improve, equip, and repair any park

administered by the board, or for the acquisition by construction

or otherwise of any facilities to be used in or connected with or

incident to such a park, the county may from time to time issue

revenue bonds.

(b) The bonds are fully negotiable instruments under Chapter 3,

Business & Commerce Code, and other laws of this state.

(c) Included among the properties, improvements, and facilities

that may be acquired through the issuance of bonds are stadiums,

coliseums, auditoriums, athletic fields, pavilions, and buildings

and grounds for assembly, including parking facilities or other

improvements incident to those facilities.

(d) The bonds must be authorized by an order adopted by the

commissioners court.

(e) The bonds must be issued in the name of the county, signed

by the county judge, attested by the county clerk, and impressed

with the seal of the commissioners court. The signature of the

county judge or the signature of the county clerk may be a

facsimile signature, and the seal of the commissioners court may

be a facsimile seal, as provided in the bond order. The interest

coupons attached to the bonds may also be executed by facsimile

signatures of officers. A facsimile signature or facsimile seal

may be lithographed, engraved, or printed.

(f) Revenue bonds must mature serially or otherwise in not more

than 40 years from their date or dates and may be sold by the

commissioners court at a price and under terms determined by the

court to be the most advantageous reasonably obtainable. The net

effective interest rate may not exceed the maximum rate provided

by Chapter 1204, Government Code.

(g) The bond order shall prescribe the details as to the bonds.

It may contain provisions for the calling of the bonds for

redemption before the respective maturity dates at particular

prices and times. Except for rights of redemption expressly

reserved in the bond order and in the bonds, the bonds are not

subject to redemption before their scheduled maturity date or

dates without the consent of the holder or holders.

(h) The bonds may be made payable at times and places in or

outside this state, as prescribed in the bond order. The bonds

may be nonregistrable or may be made registrable as to principal,

or both principal and interest, as provided in the bond order.

(i) The bonds may be issued in one or more installments and in

one or more series.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.317, eff. Sept.

1, 2001.

Sec. 320.072. ELECTION. (a) Revenue bonds may not be issued

unless authorized by a majority vote of the qualified voters of

the county voting at an election ordered for that purpose by the

commissioners court.

(b) The election shall be ordered and held, and notice of the

election shall be given, as provided by Chapter 1251, Government

Code, except that the ballot shall be printed to provide for

voting for or against the proposition: "The issuance of

$___________ in park revenue bonds payable solely from revenues."

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.318, eff. Sept.

1, 2001.

Sec. 320.073. PLEDGE OF REVENUES. (a) Revenue bonds may be

secured by a pledge of all or part of the net revenues from the

operation of the parks or from the properties or facilities. The

net revenues of any one or more contracts, operation contracts,

leases, or agreements may be pledged as the sole or as additional

security for the support of the bonds.

(b) Any revenue other than tax revenues, as specified in the

bond order, may be pledged for the support of the bonds.

(c) In the bond order, the county may reserve the right to issue

additional revenue bonds that will be on a parity with, or

subordinate to, the revenue bonds then being issued.

(d) While any of the revenue bonds are outstanding, other

obligations may not be issued against the pledged revenues except

to the extent and in the manner expressly permitted in the bond

order.

(e) In this subchapter, "net revenues" means the gross revenues

from the operation of those properties and facilities of the

parks, the net revenues of which properties and facilities are

pledged for the support of the bonds, after deduction of the

necessary and reasonable expenses of operation and maintenance of

the properties and facilities.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.074. PROCEEDS. (a) The proceeds of the bonds shall be

used under the restrictions provided in the bond order or in any

separate escrow agreement, or both. The holders of the bonds and

any trustee provided for in respect to the bonds have a lien on

the proceeds until so applied.

(b) From the bond proceeds, there may be set aside:

(1) an amount for payment of interest on the bonds during

construction and any additional period prescribed in the bond

order; and

(2) an amount for the interest and sinking fund or for one or

more separate reserve funds, as prescribed in the bond order, for

the benefit of payment of the bonds.

(c) Proceeds remaining after the amounts are set aside under

Subsection (b) shall be used for the payment of all expenses

necessarily incurred in the sale, issuance, and delivery of the

bonds and then for the purposes specified in the bond order and

in the bonds.

(d) Any surplus remaining after accomplishment of the bond

purposes shall be used for retiring the bonds to the extent that

they can be purchased at prevailing market prices, with any

remainder being deposited to the credit of the interest and

sinking fund.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.075. APPROVAL AND REGISTRATION. (a) After any bonds

have been authorized by the commissioners court, the bonds and

the records relating to their issuance shall be submitted to the

attorney general for examination and approval. The attorney

general shall approve the bonds if issued in accordance with this

subchapter.

(b) After the bonds have been approved by the attorney general,

they shall be registered by the comptroller of public accounts.

(c) When the bonds have been approved by the attorney general,

registered by the comptroller, and delivered to the purchasers,

they are incontestable.

(d) If the bonds recite that they are secured partially or

otherwise by a pledge of the proceeds of or income from any

contract, including a lease or other agreement, a copy of the

contract and of the records of the proceedings authorizing the

contract may be submitted to the attorney general with the bond

record. In that event, the approval of the bonds by the attorney

general constitutes an approval of the contract, and the contract

is incontestable except for forgery or fraud.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.076. FEES AND REVENUE. (a) In this section, "fee"

includes any fee, charge, or toll.

(b) The necessary and reasonable expenses of operation and

maintenance of the properties and facilities whose revenues are

pledged to the payment of the revenue bonds are a first lien on

and charge against the income of the properties and facilities.

While any of the bonds or interest remains outstanding, the board

shall charge and require the payment of fees for the use of the

properties and facilities. The board shall determine the rates of

fees charged by it for the use, operation, or lease of the

properties and facilities. Fees must be equal and uniform within

classes and must be in amounts that yield revenues at all times

at least sufficient to pay the expenses of operation and

maintenance, and to provide for the payments prescribed in the

bond order for the establishment and maintenance of the funds

provided for in the bond order, including the interest and

sinking fund and each reserve fund. The bond order may make

additional covenants with respect to the bonds and the pledged

revenues and the operation, maintenance, and upkeep of those

properties and facilities, the income of which is pledged.

(c) The commissioners court shall ensure that the fees charged

by the board are sufficient to comply with this subchapter. If

for any reason the fees are not sufficient, the commissioners

court shall impose additional fees so that the revenue will be

sufficient.

(d) If any part of the security for the bonds consists of money

to be received by the board as consideration for properties or

facilities belonging to the county but operated by a person other

than the board under a lease or operating contract, the board

shall fix and authorize fees to be charged by the person for

services rendered by the properties or facilities. The fees must

be in amounts at least sufficient to assure receipt by the board

of money that the board is committed to pay from that source for

the benefit of the revenue bonds under the bond order.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.077. REFUNDING BONDS. (a) The commissioners court may

issue fully negotiable revenue bonds for the purpose of refunding

bonds issued under this subchapter. An election is not necessary

for the issuance of refunding bonds.

(b) The refunding bonds may be secured in the manner provided by

this subchapter for securing original revenue bonds.

(c) Refunding bonds may be issued to refund bonds of more than

one series or issue of outstanding revenue bonds and may combine

pledges for the outstanding bonds for the security of the

refunding bonds. Refunding bonds may be secured by other and

additional revenues if the refunding bonds will not impair the

contract rights of the holders or any of the outstanding bonds

that are not to be refunded.

(d) Refunding bonds must be authorized by order of the

commissioners court and shall be executed and mature as provided

by this subchapter for original bonds.

(e) Refunding bonds must bear interest at the same or lower rate

than that of the bonds refunded unless it is shown mathematically

that a saving will result in the total amount of interest to be

paid.

(f) Refunding bonds shall be approved by the attorney general as

in the case of original bonds and shall be registered by the

comptroller of public accounts on surrender and cancellation of

the bonds to be refunded, unless the order authorizing issuance

provides that the bonds are to be sold and the proceeds deposited

in the place or places where the original bonds are payable. In

that case, the refunding bonds may be issued in an amount

sufficient to pay the interest on the original bonds to their

option or maturity date, and the comptroller shall register them

without the surrender and cancellation of the original bonds.

(g) Refunding bonds, after they have been approved by the

attorney general and registered by the comptroller, are

incontestable.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.078. BONDS NOT STATE OR COUNTY DEBT. (a) The revenue

bonds are not a debt of the county or of the state but are

payable solely from the revenues pledged to their payment.

(b) The principal of or interest on revenue bonds or any

refunding bonds is not a debt against the tax revenues of the

county but is solely a charge on the pledged revenues.

(c) The revenue bonds or refunding bonds may not be considered

in determining the power of the county to incur obligations

payable from taxation.

(d) Each bond must contain on its face substantially the

following provision: "The holder hereof shall never have the

right to demand payment of his obligation out of any funds raised

or to be raised by taxation."

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 320.079. MISCELLANEOUS PROVISIONS. (a) This section

applies to revenue bonds and refunding bonds issued under this

subchapter.

(b) The bond order may require that the bonds contain a recital

to the effect that they are issued pursuant to and in strict

conformity with this subchapter. That recital is conclusive

evidence of the validity of the bonds and the regularity of their

issuance.

(c) Each bond is exempt from taxation by this state or by a

municipal corporation, county, or other political subdivision or

taxing district or entity of the state.

(d) If provided for in the bond order, an indenture securing the

bonds may be entered into between, and executed by, the county

and a corporate trustee, or entered into between, and executed

by, the county and a corporate trustee and a corporate or

individual cotrustee. A corporate trustee or corporate cotrustee

must be a trust company or bank in or outside this state that has

the powers of a trust company.

(e) The bond order or any indenture may:

(1) contain provisions for protecting or enforcing the rights or

remedies of the bondholders as the commissioners court considers

reasonable and proper and not in violation of law, including

covenants setting forth the duties of the county and the board in

reference to maintenance, operation, repair, and insurance

(including insurance against loss of use and occupancy) of the

properties or facilities whose revenues are pledged, and the

custody, safeguarding, and application of the bond proceeds and

of the revenues to be received from the operation of the

properties or facilities;

(2) provide for the flow of funds and the establishment and

maintenance of the interest and sinking fund, reserve fund or

funds, and other funds; and

(3) include additional covenants with respect to the bonds and

the pledged revenues and the operation, maintenance, and upkeep

of those properties and facilities the income of which is

pledged, as the commissioners court considers appropriate.

(f) Any bank or trust company in this state may act as

depository for the proceeds obtained from the sale of the bonds.

The depository shall be selected by the commissioners court

without the necessity of seeking competitive bids and without

reference to any other statute. The money deposited must be

secured in the manner and amount as prescribed by the

commissioners court or by the bond order, indenture, or separate

escrow agreement.

(g) The bond order shall provide for and designate the

depository or depositories of the interest and sinking fund,

reserve fund or funds, and any other funds established by the

order. The depository or depositories may be any bank or trust

company in or outside this state and may be selected and

designated without the necessity of seeking competitive bids and

without reference to any other statute. The money in those funds

must be secured in the manner and to the extent as provided in

the bond order, and the bond order may require that the money be

secured by direct obligations of the United States or obligations

unconditionally guaranteed by the United States.

(h) The bond order or indenture may:

(1) set forth the rights and remedies of the bondholders and of

the trustee, and may, subject to Subsection (i), restrict the

individual rights of action of the bondholders; and

(2) set forth and contain other provisions and covenants as

considered reasonable and proper for the security of the

bondholders, including:

(A) provisions prescribing occurrences that constitute events of

default and the terms and conditions on which any or all of the

bonds become due, or may be declared to be due, before maturity;

and

(B) provisions as to the rights, liabilities, powers, and duties

arising from the breach by the board or by the commissioners

court of any of its duties or obligations.

(i) Any holders of the bonds or of interest coupons originally

attached to the bonds may either at law or in equity, by suit,

action, mandamus, or other proceeding, enforce and compel

performance of all duties required by this subchapter to be

performed by the board or by the commissioners court, including:

(1) the making and collection of reasonable and sufficient fees,

charges, and tolls for the use of the properties and facilities

the income of which is pledged;

(2) the segregation of the income and revenues of such

properties and facilities; and

(3) the application of the income and revenues pursuant to the

bond order, indenture, and this subchapter.

(j) The bond order or the indenture may contain provisions to

the effect that while any bonds are outstanding either as to

principal or interest, no free service may be rendered by any of

the properties or facilities the income of which is pledged.

(k) The bonds are negotiable instruments under Chapter 3,

Business & Commerce Code, and are legal and authorized

investments for banks, savings banks, trust companies, savings

and loan associations, insurance companies, fiduciaries,

trustees, guardians, and for the sinking funds of municipalities,

counties, school districts, and other political subdivisions or

corporations of this state. The bonds are eligible to secure the

deposit of public funds of this state and of a municipality,

county, school district, or other political subdivision or

corporation of this state. The bonds are lawful and sufficient

security for those deposits to the extent of their face value

when accompanied by all unmatured appurtenant coupons.

(l) The bond order, the indenture, and this subchapter

constitute an irrevocable contract between the board and

commissioners court and the holders of the bonds.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.