Texas Government Code 1371.053 – Obligation Authorization
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(a) A governing body must adopt or approve an obligation authorization before an obligation may be issued.
(b) The obligation authorization must establish:
(1) the maximum amount of the obligation to be issued or, if applicable, the maximum principal amount that may be outstanding at any time;
(2) the maximum term for which obligations issued under the authorization may be outstanding;
(3) the maximum interest rate the obligation will bear;
(4) subject to Subsection (c)(2), the manner of sale of the obligation, which may be by public or private sale, the price of the obligation, the form of the obligation, and the terms and covenants of the obligation; and
(5) each source securing payment of the obligation.
Terms Used In Texas Government Code 1371.053
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- 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.
(c) The obligation authorization may:
(1) provide for the designation of a paying agent and registrar for the obligation; and
(2) authorize one or more designated officers or employees of the issuer to act on behalf of the issuer from time to time in selling and delivering the obligation and setting the dates, price, interest rates, interest payment periods, and other procedures relating to the obligation, as specified in the obligation authorization.
(d) An obligation may:
(1) be issued in a specified form or denomination;
(2) be payable:
(A) at one or more times;
(B) in installments or a specified amount or amounts;
(C) at a specified place or places;
(D) in a specified form;
(E) under specified terms and details; and
(F) in a specified manner; and
(3) be issued as redeemable before maturity at one or more specified times.