Texas Transportation Code 454.025 – Encumbrance of Transportation System
(a) To secure the payment of bonds or notes issued under this chapter, a municipality may encumber:
(1) all or any part of the mass transportation system;
(2) the property of the system, including a bus or other vehicle, machinery, and equipment of any kind used in the operation of the system;
(3) the revenue of the system;
(4) the franchise of the system; or
(5) any other thing relating to the system that is acquired or is to be acquired.
(b) A municipality may:
(1) encumber separately any property, including a bus or other vehicle, machinery, or equipment of any kind; or
(2) acquire, hold, use, or contract for any property, including a bus or other vehicle, machinery, or equipment of any kind, under a lease arrangement, chattel mortgage, or conditional sale, including an equipment trust transaction.
Terms Used In Texas Transportation Code 454.025
- 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
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Property: means real and personal property. See Texas Government Code 311.005
(c) This chapter does not prohibit a municipality from encumbering a transportation system for the purposes of purchasing, building, mortgaging, extending, or repairing, or reconstructing another system and purchasing necessary property in connection with the system.