6 Oct 2008
DALLAS- The Dallas Independent School District has filed a petition in state court seeking an expedited declaratory judgment to validate the bonds and the bond expenditures approved by the voters in the 2008 bond program.
In July 2008, a group of Dallas residents filed a lawsuit in federal court seeking to enjoin Dallas ISD from selling the 2008 bonds.
Texas law provides that prior to the issuance and sale of bonds, school districts and other public entities must submit their proposed bond issuance and sale to the Texas Attorney General for examination and approval. Usually, if there is pending litigation that involves a public entity bond issue, the Attorney General will not approve the issuance of the bonds.
Consequently, absent the approval of the Attorney General of the sale of the bonds, Dallas ISD will not be able to proceed with system-wide improvements to school facilities.
Thus, Dallas ISD has filed a Chapter 1205 action in state court seeking an expedited declaratory judgment and determination by the court regarding the validity and legality of the bonds, and bond expenditures as approved by the voters.
Texas Government Code Chapter 1205 was enacted for the express purpose of expediting the resolution of public finance disputes, the very existence of which operate to delay the issuance or expenditure of bonds.
Filing a Chapter 1205 petition provides Dallas ISD an expedited opportunity to (a) resolve legal issues regarding the public bonds, and (b) obtain a declaratory judgment from a State court Judge that validates the legality of the bonds and the bond expenditures.
If a Judge declares the bonds and the proposed bond expenditures to be legal and valid, and the legal process is complete, the Attorney General will have the opportunity to approve the bond issue.