(a) As an alternative for, or in addition to, the procedure provided by § 364.053, the board of directors of a district may validate its bonds by filing suit under Chapter 1205, Government Code.
(b) The interest rate and sale price of the bonds need not be fixed until after the termination of the validation proceedings or suit.

Terms Used In Texas Health and Safety Code 364.054

  • Allegation: something that someone says happened.
  • Contract: A legal written agreement that becomes binding when signed.
  • 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

(c) If the proposed bonds recite that they are secured by the proceeds of a contract made by the district and one or more public agencies, the petition must allege that fact and the notice of the suit must mention that allegation and each public agency’s fund or revenues from which the contract is payable.
(d) The suit is a proceeding in rem, and the judgment is res judicata as to the validity of the bonds and any contract and the pledge of revenues.

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