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A BILL TO BE ENTITLED
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AN ACT
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relating to the sale of bonds by certain special purpose districts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 49.183, Water Code, is amended by |
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amending Subsections (a), (b), and (e) and adding Subsections |
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(a-1), (a-2), (f), (g), (h), and (i) to read as follows: |
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(a) Bonds [Except for refunding bonds, or bonds sold to a |
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state or federal agency or to the North American Development Bank, |
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bonds] issued by a district shall be sold either by: |
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(1) private sale; or |
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(2) public sale after advertising for and receiving |
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competitive sealed bids. |
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(a-1) Bonds sold by public sale [and] shall be awarded to |
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the bidder whose bid produces the lowest net effective interest |
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rate to the district. |
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(a-2) Before the private sale of bonds issued by a district, |
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the board shall consult with the district's financial advisor to |
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determine whether the private sale will result in a net effective |
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interest rate for the district equal to or less than the projected |
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lowest net effective interest rate for the district if the bonds had |
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been sold by public sale. |
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(b) Before [Except for refunding bonds, or bonds sold to a |
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state or federal agency or to the North American Development Bank, |
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before] any bonds are sold by a district by public sale, the board |
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shall publish an appropriate notice of the sale: |
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(1) at least one time not less than 10 days before the |
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date of sale in a newspaper of general circulation in the county or |
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counties in which the district is located; and |
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(2) at least one time in one or more recognized |
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financial publications of general circulation in the state as |
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approved by the state attorney general. |
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(e) Subsections (a), (a-1), and (b) do not apply to district |
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bonds issued pursuant to Chapter 1371, Government Code. |
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(f) For bonds sold by private sale, the district may: |
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(1) authorize: |
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(A) the principal amount of bonds that may be |
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issued; |
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(B) the principal amount to mature each year; |
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(C) the maximum rate of interest to be borne by |
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the bonds; and |
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(D) any other term the district considers |
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relevant to the issuance of the bonds; and |
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(2) delegate to any officer or director of the |
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district the authority to carry out the sale of the bonds. |
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(g) In exercising the authority delegated by the district |
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under Subsection (f), the district may establish the terms related |
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to the issuance and sale of the bonds, including: |
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(1) the form of the bonds; |
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(2) the principal amount of the bonds and the amount of |
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the bonds to mature each year; |
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(3) the dates, price, interest rates, interest payment |
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dates, principal payment dates, and redemption feature of the |
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bonds; and |
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(4) any other term relating to the issuance and sale of |
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the bonds as specified by the district in the proceedings |
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authorizing the issuance of the bonds. |
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(h) At the time a district enters into a bond purchase |
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agreement for the private sale of bonds issued by the district, the |
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board, or the board's authorized representative, and the district's |
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financial advisor shall review recently completed sales of bonds |
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issued by districts, including the net effective interest rate and |
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issuance costs for the sale of the bonds, to determine whether the |
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district will receive a fair market price for the private sale of |
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bonds issued by the district under the bond purchase agreement. |
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(i) A finding or determination made by a director or officer |
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acting under the authority delegated to that director or officer |
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has the same force and effect as a finding or determination made by |
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the district. |
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SECTION 2. Section 49.183, Water Code, as amended by this |
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Act, applies only to the sale of bonds by a special purpose district |
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on or after the effective date of this Act. The sale of bonds by a |
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special purpose district before the effective date of this Act is |
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governed by the law in effect when bonds were sold, and the former |
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law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2023. |