Sec. 317.112. ENCUMBRANCE AS ADDITIONAL SECURITY. (a) As additional security for the payment of revenue bonds issued under this chapter, the governing body of a municipality may have executed in favor of the bondholders an indenture or deed of trust that encumbers all or part of a facility the net revenue of which is pledged to the payment of the bonds, including the land on which the facility is located.

(b) An indenture or deed of trust entered into under this section:

(1) may contain terms considered proper by the governing body;

(2) may provide for a grant, to any purchaser at a foreclosure sale, of a franchise to operate the facility for a term not to exceed 40 years from the date of the purchase, subject to all laws regulating same then in force; and

(3) is enforceable in the manner provided under the laws of this state for the enforcement of other encumbrances.

(c) Under a sale ordered under the provisions of an encumbrance entered into under this section, the purchaser and the purchaser's successors or assigns are vested with:

(1) a permit or franchise to maintain the facility that conforms to the provisions stipulated in the indenture or deed of trust;

(2) powers and privileges similar to those of the municipality in the operation of the facility; and

(3) the right to remove all or part of the facility for diversion to other purposes.

(d) The laws of this state other than this chapter do not apply to the authorization or execution of an encumbrance entered into under this chapter or to the granting of a franchise under this chapter.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 24, eff. Sept. 1, 1999.