COMPETITIVE BIDS AND PAYMENT OR PERFORMANCE BONDS NOT REQUIRED.

(a) A municipality that issues revenue bonds to finance the construction or acquisition of a building, improvement, or facility at an airport owned and operated by the municipality may spend all or part of the bond proceeds without inviting, advertising for, or otherwise requiring competitive bids for constructing or acquiring the building, improvement, or facility or requiring or obtaining payment bonds or performance bonds in connection with the construction or acquisition of the building, improvement, or facility if:

(1) the building, improvement, or facility is leased by the municipality to a private entity under a lease agreement under which the lessee is:

(A) obligated to maintain the building, improvement, or facility solely at the lessee's expense; and

(B) unconditionally obligated, for the term of the bonds, to make payments of net rent that are pledged to the payment of the bonds in an amount and at a time that is sufficient to provide for the timely payment of principal, interest, redemption premiums, and other expenses arising in connection with the payment of the bonds; and

(2) the bonds:

(A) provide by their terms that the bonds:

(i) are payable solely from net rent as prescribed by Subsection (a)(1)(B); and

(ii) may not be repaid under any circumstances from proceeds of a tax; and

(B) do not create or provide for the creation of a lien on real property owned by the municipality.

(b) This subchapter does not affect the obligation of a municipality to obtain competitive bids or require a payment bond or performance bond in connection with a contract for the construction of a building, improvement, or facility if the contract is awarded by the municipality.