Texas § GV.1433.101 - SECURITY FOR BOND

§ GV.1433.101. SECURITY FOR BOND

SECURITY FOR BOND; TRUST AGREEMENT. (a) A bond issued under this chapter may be secured by a trust agreement between the issuer and a trust company or a bank having the powers of a trust company in this state. (b) A trust agreement may: (1) assign the lease revenue to be received from the lessee or the ultimate lessee of the industrial project or medical project for which the bond proceeds are used; or (2) pledge the lease revenue for the payment of principal of and interest on the bond as they become due and payable and may provide for the creation and maintenance of reserves for that purpose. (c) A trust agreement or a resolution providing for the issuance of the bonds may contain provisions for protecting and enforcing the rights and remedies of the bondholders, including covenants that state the duties of the issuer or lessee relating to: (1) the acquisition of property for the industrial project or medical project in connection with which the bonds were authorized; (2) the construction, improvement, maintenance, repair, operation, and insurance of the project; and (3) the custody, protection, and application of all money related to the project. (d) An issuer may require a bank or trust company incorporated under the laws of this state that acts as depository of the proceeds of the bonds or of revenue of the issuer to furnish indemnifying bonds or to pledge securities. (e) A trust agreement may state the rights and remedies of the bondholders and of the trustee, and may restrict the individual right of action by bondholders as is customary in trust agreements or trust indentures securing bonds and debentures of corporations. A trust agreement may contain additional provisions for the security of the bondholders. (f) All expenses incurred in carrying out a trust agreement may be treated as a part of the cost of the operation of the industrial project or medical project. Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1, 1999.