By Marchant H.B. No. 695
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the issuance of anticipation notes by counties and
1-3 municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 1, Title 22, Revised Statutes, is amended
1-6 by adding Article 717w to read as follows:
1-7 Art. 717w. ANTICIPATION NOTES
1-8 Sec. 1. DEFINITIONS. In this article:
1-9 (1) "Amount available" includes cash, marketable
1-10 securities, or money in an account that, without state legislative
1-11 action or judicial action, may be used to pay an issuer's
1-12 anticipated expenditures. The term does not include:
1-13 (A) money in an account that is subject to a
1-14 legislative, judicial, or contractual requirement that the account
1-15 be reimbursed; or
1-16 (B) the proceeds of an anticipation note issued
1-17 under this article.
1-18 (2) "Anticipated expenditure" means an expenditure
1-19 that is payable from anticipated tax or other revenue.
1-20 (3) "Anticipation note" means a note issued under this
1-21 article.
1-22 (4) "Cash reserve" means an amount reasonably required
1-23 by an issuer for the payment of unanticipated expenditures. For
2-1 purposes of this article, an amount equal to one month's
2-2 anticipated expenditures is presumed to be reasonably required as a
2-3 cash reserve.
2-4 (5) "Cumulative cash flow reserve deficit" means, for
2-5 the period for which the amount is determined, the amount by which
2-6 the sum of an issuer's anticipated expenditures plus the issuer's
2-7 cash reserve exceeds the amount available for payment of the
2-8 anticipated expenditures.
2-9 (6) "Governing body" means the board, council,
2-10 commission, court, or other body or group authorized to issue
2-11 anticipation notes for or on behalf of an issuer.
2-12 (7) "Issuer" means a municipality or county.
2-13 Sec. 2. CONFLICT WITH OTHER LAW. If there is a conflict
2-14 between this article and another statute, the issuer may use either
2-15 provision, and it is not necessary for the governing body to
2-16 designate the law under which the action is being taken.
2-17 Sec. 3. PURPOSES FOR WHICH ANTICIPATION NOTES MAY BE
2-18 AUTHORIZED. The governing body of an issuer may authorize
2-19 anticipation notes to:
2-20 (1) pay a contractual obligation incurred or to be
2-21 incurred for the construction of any public work;
2-22 (2) pay a contractual obligation incurred or to be
2-23 incurred for the purchase of materials, supplies, equipment,
2-24 machinery, buildings, lands, and rights-of-way for city council or
2-25 commissioners court authorized needs and purposes;
3-1 (3) pay a contractual obligation incurred or to be
3-2 incurred for professional services, including but not limited to
3-3 services provided by tax appraisers, engineers, architects,
3-4 attorneys, mapmakers, auditors, financial advisors, and fiscal
3-5 agents;
3-6 (4) pay operating expenses or current expenses or
3-7 (5) fund the issuer's cumulative cash flow reserve
3-8 deficit.
3-9 Sec. 4. ADDITIONAL AUTHORITY FOR COUNTIES AND CERTAIN
3-10 MUNICIPALITIES. (a) This section applies only to:
3-11 (1) a county; or
3-12 (2) a home-rule municipality that has a population of
3-13 90,000 or more, according to the most recent federal census.
3-14 (b) Notwithstanding anything in this article to the
3-15 contrary, the governing body of an issuer described by Subsection
3-16 (a) of this section may exercise the authority granted to the
3-17 governing body of an issuer with regard to issuance of obligations
3-18 under Chapter 656, Acts of the 68th Legislature, Regular Session,
3-19 1983 (Article 717q, Vernon's Texas Civil Statutes), except that the
3-20 prohibition in that Act on the repayment of an obligation with
3-21 funds derived from ad valorem taxation does not apply to an issuer
3-22 exercising the authority granted under this section.
3-23 Sec. 5. AUTHORIZATION OF ANTICIPATION NOTES BY ORDINANCE OR
3-24 ORDER. Anticipation notes may be authorized by an ordinance
3-25 adopted by the governing body of a municipality or by an order
4-1 adopted by the governing body of a county.
4-2 Sec. 6. RESTRICTIONS ON ANTICIPATION NOTES. (a) Except as
4-3 provided by Subsection (b) of this section, anticipation notes
4-4 issued under this article are subject to:
4-5 (1) Chapter 503, Acts of the 54th Legislature, 1955
4-6 (Article 717k, Vernon's Texas Civil Statutes);
4-7 (2) Chapter 3, Acts of the 61st Legislature, Regular
4-8 Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes);
4-9 (3) Chapter 784, Acts of the 61st Legislature, Regular
4-10 Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes);
4-11 (4) the Bond Procedures Act of 1981 (Article 717k-6,
4-12 Vernon's Texas Civil Statutes);
4-13 (5) Section 3.001 through 3.003, Chapter 53, Acts of
4-14 the 70th Legislature, 2nd Called Session, 1987, (Article 717k-8,
4-15 Vernon's Texas Civil Statutes);
4-16 (6) Chapter 400, Acts of the 66th Legislature, 1979
4-17 (Article 717m-1, Vernon's Texas Civil Statutes).
4-18 (b) Chapter 656, Acts of the 68th Legislature, Regular
4-19 Session, 1983 (Article 717q, Vernon's Texas Civil Statutes),
4-20 governs approval by the attorney general of anticipation notes
4-21 issued under Section 4 of this article.
4-22 (c) A governing body may not issue anticipation notes that
4-23 are to be payable from bonds to be issued in the future unless the
4-24 bonds have been approved by the voters in an election held by the
4-25 issuer.
5-1 (d) A governing body may not use proceeds from the sale of
5-2 anticipation notes to repay interfund or other borrowing that
5-3 occurred more than 12 months before the date of the ordinance or
5-4 order authorizing the issuance of the notes.
5-5 (e) Anticipation notes issued for a purpose described by
5-6 Subdivision (1), (2), or (3) of Section 3 of this article must
5-7 mature before the seventh anniversary of the date that the attorney
5-8 general approves the notes.
5-9 (f) Anticipation notes issued for a purpose described in
5-10 Subdivision (4) or (5) of Section 3 of this article must mature
5-11 before the first anniversary of the date that the attorney general
5-12 approves the notes.
5-13 (g) Anticipation notes issued under Subdivision (4) of
5-14 Section 3 of this article may not exceed 75 percent of the revenues
5-15 or taxes anticipated to be collected in the fiscal year in which
5-16 the attorney general approves the notes.
5-17 Sec. 7. PROVISIONS IN ANTICIPATION NOTES. The governing
5-18 body may:
5-19 (1) make the notes payable at the times and places
5-20 determined by the governing body;
5-21 (2) issue the notes in forms and one or more
5-22 denominations, either in coupon form or registered as to principal
5-23 and interest, or both;
5-24 (3) make the notes contain options for redemption
5-25 before the scheduled maturity; and
6-1 (4) make the notes contain other provisions the
6-2 governing body desires.
6-3 Sec. 8. SALE OF ANTICIPATION NOTES. The governing body may
6-4 sell anticipation notes at public or private sale for cash.
6-5 Sec. 9. SOURCE OF PAYMENT. (a) The governing body may
6-6 provide that anticipation notes will be paid from and secured by
6-7 revenues, taxes, or the proceeds of bonds to be issued by the
6-8 issuer.
6-9 (b) The governing body may pledge to the payment of
6-10 anticipation notes revenues, taxes, or the proceeds of bonds to be
6-11 issued by the issuer. If an ad valorem tax to be assessed and
6-12 collected in a subsequent fiscal year is pledged to the payment of
6-13 anticipation notes, the governing body of the issuer shall levy the
6-14 tax in the ordinance or order that authorizes the issuance of the
6-15 notes.
6-16 SECTION 2. This Act takes effect September 1, 1993.
6-17 SECTION 3. The importance of this legislation and the
6-18 crowded condition of the calendars in both houses create an
6-19 emergency and an imperative public necessity that the
6-20 constitutional rule requiring bills to be read on three several
6-21 days in each house be suspended, and this rule is hereby suspended.