Local Government Code § 321.073

Sec. 321.073. PROCEEDS. (a) The proceeds of the bonds shall be used under the restrictions provided in the order. The holders of the bonds and any trustee provided for in respect to the bonds have a lien on the proceeds until so applied, but neither the depository of those funds nor the trustee is obligated to see to the proper application of the funds except as expressly provided in the order or the indenture securing the bonds. (b) From the bond proceeds there may be set aside: (1) an amount for payment of interest on the bonds estimated to accrue during the construction period and any additional period prescribed in the order; and (2) an amount for the interest and sinking fund or another reserve fund provided for in the order. (c) Proceeds remaining after the amounts are set aside under Subsection (b) shall be used for the payment of all expenses necessarily incurred in the issuance and sale of the bonds and then for the purposes specified in the bond order and in this chapter. (d) Any surplus remaining after accomplishment of the bond purposes shall be used for retiring the bonds to the extent that they can be purchased at prevailing market prices, with any remainder being deposited to the credit of the fund established in the order for debt service. Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.