Texas Government Code 1503.202 – Competitive Bids and Payment or Performance Bonds Not Required
(a) A municipality that issues revenue bonds to finance the construction or acquisition of a building, improvement, or facility at an airport owned and operated by the municipality may spend all or part of the bond proceeds without inviting, advertising for, or otherwise requiring competitive bids for constructing or acquiring the building, improvement, or facility or requiring or obtaining payment bonds or performance bonds in connection with the construction or acquisition of the building, improvement, or facility if:
(1) the building, improvement, or facility is leased by the municipality to a private entity under a lease agreement under which the lessee is:
(A) obligated to maintain the building, improvement, or facility solely at the lessee’s expense; and
(B) unconditionally obligated, for the term of the bonds, to make payments of net rent that are pledged to the payment of the bonds in an amount and at a time that is sufficient to provide for the timely payment of principal, interest, redemption premiums, and other expenses arising in connection with the payment of the bonds; and
(2) the bonds:
(A) provide by their terms that the bonds:
(i) are payable solely from net rent as prescribed by Subsection (a)(1)(B); and
(ii) may not be repaid under any circumstances from proceeds of a tax; and
(B) do not create or provide for the creation of a lien on real property owned by the municipality.
(b) This subchapter does not affect the obligation of a municipality to obtain competitive bids or require a payment bond or performance bond in connection with a contract for the construction of a building, improvement, or facility if the contract is awarded by the municipality.
Terms Used In Texas Government Code 1503.202
- Contract: A legal written agreement that becomes binding when signed.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.