LOCAL GOVERNMENT CODE
CHAPTER 107. OBLIGATIONS FOR CERTAIN LIABILITIES TO PUBLIC PENSION
FUNDS OF A MUNICIPALITY
§ 107.001. DEFINITIONS. In this chapter:
(1) "Obligation" includes a bond, certificate, note,
or book entry obligation.
(2) "Unfunded liability" means an unfunded, accrued
liability of a municipality to a public pension fund as determined
by actuarial analysis.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, eff. Sept. 1, 2003.
§ 107.002. DEFINITION OF "PUBLIC PENSION FUND." In this
chapter, "public pension fund":
(1) means a continuing, organized program or plan of
service retirement, disability retirement, or death benefits for
officers or employees of a municipality;
(2) includes a plan qualified under Section 401(a),
Internal Revenue Code of 1986, as amended; and
(3) does not include:
(A) a program that provides only workers'
compensation benefits;
(B) a program administered by the federal
government;
(C) a plan described by Section 401(d), Internal
Revenue Code of 1986, as amended;
(D) an individual retirement account consisting
of an annuity contract described by Section 403(b), Internal
Revenue Code of 1986, as amended;
(E) an individual retirement account as defined
by Section 408(a), Internal Revenue Code of 1986, as amended;
(F) an individual retirement annuity as defined
by Section 408(b), Internal Revenue Code of 1986, as amended;
(G) an eligible deferred compensation plan as
defined by Section 457(b), Internal Revenue Code of 1986, as
amended; or
(H) a program for which benefits are administered
by a life insurance company or for which the only funding agency is
a life insurance company.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, eff. Sept. 1, 2003.
§ 107.003. PENSION FUND OBLIGATIONS AUTHORIZED. (a) A
municipality may issue obligations to fund all or any part of an
unfunded liability.
(b) Before authorizing issuance and delivery of an
obligation under this section, the governing body of the
municipality must enter into a written agreement with the governing
body of the public retirement system that:
(1) has fiduciary responsibility for assets of the
public pension fund or public pension funds that are to receive the
net proceeds of the obligations to be issued; and
(2) has the duty to oversee the investment and
expenditure of the assets of the public pension fund.
(c) The written agreement must state the amount of the
unfunded liability and the date or dates on which the public pension
fund will accept the net proceeds of the obligations to be issued in
payment of all or a portion of the unfunded liability.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, eff. Sept. 1, 2003.
§ 107.004. PROCEEDS OF OBLIGATIONS ISSUED. The
municipality shall deposit the net proceeds of obligations issued
under Section 107.003 to the credit of the public pension fund. The
amount deposited under this section becomes part of the public
pension fund's assets.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, eff. Sept. 1, 2003.
§ 107.005. PAYMENT OF OBLIGATIONS. An obligation
issued under Section 107.003 may be made payable by the
municipality from:
(1) the fund from which compensation is paid to its
officers and employees;
(2) its general fund; or
(3) taxes, revenues, both taxes and revenues, or any
other source or combination of sources of money that the
municipality may use under state law to secure or pay any kind of
bond or obligation.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, Sept. 1, 2003.
§ 107.006. OBLIGATION AS REFINANCING. An obligation
issued under Section 107.003 is a complete or partial refinancing
of a commitment of the municipality to fund its unfunded liability.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, eff. Sept. 1, 2003.
§ 107.007. SALE OF OBLIGATIONS; MATURITY. Obligations
issued under Section 107.003 may be sold at private or public sale
and must mature not later than the 30th anniversary of the date of
issuance.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, eff. Sept. 1, 2003.
§ 107.008. ADDITIONAL AUTHORITY; CREDIT
AGREEMENTS. (a) In this section, "credit agreement" and
"obligation" have the meanings assigned by Section 1371.001,
Government Code.
(b) The governing body of a municipality that issues
obligations under Section 107.003 may exercise any of the rights or
powers of the governing body of an issuer under Chapter 1371,
Government Code, and may enter into a credit agreement under that
chapter. An obligation issued under Section 107. 003 is an
obligation under Chapter 1371, Government Code, but is not required
to be rated as required by that chapter.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, eff. Sept. 1, 2003.
§ 107.009. CHAPTER CONTROLLING. This chapter prevails
over any conflict between this chapter and:
(1) another law respecting the issuance of obligations
of a municipality; or
(2) a municipal home-rule charter.
Added by Acts 2003, 78th Leg., ch. 1271, § 1, eff. Sept. 1, 2003.
