Local Government Code § 322.073

Sec. 322.073. PROCEEDS. (a) The proceeds of the bonds shall be used under the restrictions provided in the resolution. 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 ensure the proper application of the funds except as expressly provided in the resolution 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 resolution; and (2) an amount for the interest and sinking fund or another reserve fund provided for in the resolution. (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 resolution. (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 or be retained for future expansion or improvements. Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.