Sec. 374.026. URBAN RENEWAL BONDS. (a) An urban renewal agency created under this subchapter may issue bonds from time to time to finance an urban renewal project, including the payment of principal and interest on any advances for surveys and plans. The agency may also issue refunding bonds for the payment or retirement of bonds previously issued.

(b) Bonds issued under this section must be made payable, both as to principal and interest, only from the income, proceeds, revenues, and funds of the urban renewal agency that are derived from or held in connection with the conduct of urban renewal projects. Payment of the principal and interest of the bonds may be further secured by a pledge of any loan, grant, or contribution from the federal government, or from any other source, in aid of an urban renewal project, or by a mortgage of such a project if title is held by the urban renewal agency.

(c) A bond issued under this section is not an indebtedness of the state or of a political subdivision of the state other than the issuing urban renewal agency and is not subject to any other law relating to the authorization, issuance, or sale of bonds.

(d) A bond issued under this section is issued for an essential public and governmental purpose and is, with the interest on the bond and the income from it, exempt from taxes.

(e) A bond issued under this section must be authorized by a resolution or ordinance of the governing body of the urban renewal agency and may be issued in one or more series. The bond must bear the date, be payable on demand or mature at a time or times, bear interest at a rate, be in a denomination or denominations, be in either coupon or registered form, carry conversion or registration privileges, have a rank or priority, have a manner of execution, be payable in a medium of payment and at a place or places of payment, be subject to terms of redemption, with or without premium, be secured in a manner, and have any other characteristics, as provided by the resolution, trust indenture, or mortgage issued in relation to the bond.

(f) A bond issued under this section may be sold at not less than par at a public sale held after notice is published in a newspaper of general circulation in the area of operation and in any other medium of publication determined by the urban renewal agency and may also be exchanged for other bonds on a par basis. A bond issued under this section is fully negotiable.

(g) A bond issued under this section may be sold to the federal government at not less than par at a private sale. If less than all of the authorized principal amount of the bonds is sold to the federal government, the balance may be sold at a private sale at not less than par at an interest cost to the urban renewal agency that does not exceed the interest cost to the agency of the part of the bonds sold to the federal government.

(h) If the officials whose signatures appear on bonds or coupons issued under this section cease to be officials of the urban renewal agency before the delivery of the bonds, their signatures are valid for all purposes as if they had remained in office until delivery.

(i) In an action involving the validity or enforceability of a bond issued under this subchapter or the security for such a bond, a bond that recites in substance that it was issued by an urban renewal agency in connection with an urban renewal project is conclusively considered to have been issued for those purposes, and the project is conclusively considered to have been conducted in accordance with this chapter.

(j) A bank, trust company, banker, savings bank and institution, savings and loan association, investment company, and other person conducting a banking or investment business, an insurance company, insurance association, and other person conducting an insurance business, and an executor, administrator, curator, trustee, and other fiduciary may invest a sinking fund, money, or other fund belonging to it or in its control in any bonds or obligations issued by an urban renewal agency under this section. Those bonds or other obligations must be secured by an agreement between the issuer and the federal government in which the issuer agrees to borrow from the federal government and the federal government agrees to lend to the issuer, before the maturity of the bonds or other obligations, money in an amount that, together with any other money irrevocably committed to the payment of interest on the bonds or other obligations, is sufficient to pay the principal of the bonds or other obligations with interest to maturity. Under the terms of the agreement the money must be used to pay the principal of and interest on the bonds or other obligations at maturity. Those bonds and other obligations are authorized security for a public deposit. Any person may use funds owned or controlled by the person to purchase those bonds or obligations. This subsection does not relieve a person of a duty to exercise reasonable care in selecting securities.

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