TAX INCREMENT BONDS AND NOTES ISSUED BY LOCAL GOVERNMENT MEMBER IN CERTAIN DISTRICTS.

(a) This section applies only to a district created before January 1, 2005.

(b) A local government member of a district creating a transportation infrastructure zone may issue tax increment bonds or notes, including refunding bonds, secured by revenue in the local government's tax increment fund. Proceeds of bonds issued under this section may be used to:

(1) pay project costs for the zone on behalf of which the bonds or notes were issued; or

(2) satisfy claims of holders of the bonds or notes.

(c) Tax increment bonds and notes are payable, as to both principal and interest, solely from the tax increment fund established for the transportation infrastructure zone. The local government may pledge irrevocably all or part of the fund for payment of tax increment bonds or notes. The part of the fund pledged in payment may be used only for the payment of the bonds or notes or interest on the bonds or notes until the bonds or notes have been fully paid. A holder of the bonds or notes or of coupons issued on the bonds has a lien against the fund for payment of the bonds or notes and interest on the bonds or notes and may protect or enforce the lien at law or in equity.

(d) A tax increment bond or note is not a general obligation of the local government issuing the bond or note. A tax increment bond or note does not give rise to a charge against the general credit or taxing powers of the local government and is not payable except as provided by this section.

(e) A local government's obligation to deposit sales and use taxes into the tax increment fund is not a general obligation of the local government. An obligation to make payments from sales and use taxes does not give rise to a charge against the general credit or taxing powers of the local government and is not payable except as provided by this section. A tax increment bond or note issued under this section that pledges payments must state the restrictions of this section on its face.

(f) A tax increment bond or note may not be included in any computation of the debt of the issuing local government.