73R4502 DWS-F
          By Goodman                                            H.B. No. 1273
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the issuance of obligations and the execution of credit
    1-3  agreements by certain governmental entities.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Sections 1(3), (5), and (6), Chapter 656, Acts of
    1-6  the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's
    1-7  Texas Civil Statutes), are amended to read as follows:
    1-8        (3)  "Eligible project" means the acquisition or construction
    1-9  of and improvements, additions, or extensions to a public utility,
   1-10  one or more, including capital assets and facilities incident and
   1-11  related to the operation, maintenance, and administration thereof,
   1-12  and, with respect to properties and facilities for (A) the
   1-13  generation of electric power and energy, fuel acquisition, or
   1-14  development or facilities for the transportation thereof; (B) a
   1-15  public transportation system, buildings, structures, terminals,
   1-16  rolling stock, garages, shops, equipment, and other facilities
   1-17  (including vehicle parking areas and facilities necessary or
   1-18  convenient for the beneficial use and access of persons and
   1-19  vehicles to stations, terminals, yards, cars, and buses or for the
   1-20  protection and environmental enhancement of such facilities) for
   1-21  mass public transportation; <and> (C) a port facility, wharves,
   1-22  docks, warehouses, grain elevators, other storage facilities,
   1-23  bunkering facilities, port-related railroads and bridges, floating
   1-24  plants and facilities, lightering facilities, cargo handling
    2-1  facilities, towing facilities, and all other facilities or aids
    2-2  incident to or useful in the operation of a port facility; and (D)
    2-3  a project for which there exist authorized but unissued obligations
    2-4  approved by a majority of the voters of the issuer, including
    2-5  obligations payable from ad valorem taxes.
    2-6        (5)  "Obligations" means notes, warrants, or other special
    2-7  obligations authorized to be issued by an issuer under the
    2-8  provisions of this Act and all "bonds" as defined in the Bond
    2-9  Procedures Act of 1981 (Article 717k-6, Revised Statutes), which,
   2-10  prior to the delivery thereof, have been rated by a nationally
   2-11  recognized rating agency for municipal securities in either one of
   2-12  the three highest rating categories for short term obligations or
   2-13  one of the four highest rating categories for long term
   2-14  obligations.  It is provided, however, that the term "obligations"
   2-15  does not mean or include any obligations payable from ad valorem
   2-16  taxes, except as specifically permitted by this Act.
   2-17        (6)  "Credit agreement" means loan agreement, revolving
   2-18  credit agreement, agreement establishing a line of credit, letter
   2-19  of credit, reimbursement agreement, insurance contract, commitments
   2-20  to purchase obligations, purchase or sale agreements, or
   2-21  commitments or other contracts or agreements authorized and
   2-22  approved by the governing body of an issuer either in connection
   2-23  with the authorization, issuance, security, exchange, payment,
   2-24  purchase, or redemption of obligations and/or interest thereon, or
   2-25  as otherwise authorized by this Act.
   2-26        SECTION 2.  Section 2, Chapter 656, Acts of the 68th
   2-27  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
    3-1  Civil Statutes), is amended by amending Subsection (a) and adding
    3-2  Subsection (c) to read as follows:
    3-3        (a)  The governing body of an issuer is hereby authorized and
    3-4  empowered to issue, sell, and deliver obligations and to execute
    3-5  and deliver credit agreements <in relation thereto> to finance
    3-6  project costs of an eligible project, or to refund obligations
    3-7  issued in connection with an eligible project as may be authorized
    3-8  and approved by the governing body, subject to the limitations
    3-9  contained herein.  Obligations shall be secured solely by (A) the
   3-10  proceeds of sale of other obligations; (B) the proceeds of sale of
   3-11  revenue bonds payable from the revenue to be received from a public
   3-12  utility or a specified user of a public utility; (C) any revenues
   3-13  which the issuer is authorized by any statute, city home-rule
   3-14  charter, or constitutional provision to pledge to the payment of
   3-15  any obligations; or (D) any one or more of such sources, including
   3-16  credit agreements, all as the governing body of the issuer shall
   3-17  provide in the resolution, order, or ordinance authorizing the
   3-18  issuance of the obligations.  Obligations shall be repaid from the
   3-19  source or sources securing the payment thereof, funds received from
   3-20  a credit agreement, or from any other revenues otherwise legally
   3-21  available for the payment thereof, except funds derived from ad
   3-22  valorem taxation unless the use of ad valorem taxes is in
   3-23  accordance with Subsection (c) of this section.  An issuer may
   3-24  execute a credit agreement in relation to the issuance, payment,
   3-25  sale, resale, or exchange of obligations at any time, without
   3-26  regard to whether a credit agreement was contemplated, authorized,
   3-27  or executed in relation to the initial issuance, sale, and delivery
    4-1  of obligations.
    4-2        (c)  The governing body of an issuer may secure obligations
    4-3  and pay the cost of credit agreements executed and delivered in
    4-4  connection with financing the project costs of eligible projects
    4-5  with ad valorem taxes or with other sources permitted by this Act.
    4-6        SECTION 3.  Section 4, Chapter 656, Acts of the 68th
    4-7  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
    4-8  Civil Statutes), is amended to read as follows:
    4-9        Sec. 4.  The governing body of an issuer may enter into
   4-10  credit agreements in conjunction with the issuance, payment, sale,
   4-11  resale, or exchange of obligations to enhance the security for or
   4-12  provide for the payment, redemption, or remarketing of the
   4-13  obligations and interest on the obligations <or> to reduce the
   4-14  interest payable on the obligations or in conjunction with the
   4-15  interim financing of eligible projects of the issuer.  A credit
   4-16  agreement is an agreement for professional services and shall
   4-17  contain the terms and conditions and be for the period that the
   4-18  governing body of the issuer approves.  The cost to the issuer of
   4-19  the credit agreement may be paid from the proceeds of the sale of
   4-20  the obligations to which the credit agreement relates or from any
   4-21  other source, including:
   4-22              (1)  revenues of the issuer that are available for the
   4-23  purpose of paying the obligations;
   4-24              (2)  <and> the interest on the obligations or that may
   4-25  otherwise be legally available to make those payments;  and
   4-26              (3)  ad valorem taxes to the extent permitted by this
   4-27  Act.
    5-1        SECTION 4.  Section 5, Chapter 656, Acts of the 68th
    5-2  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
    5-3  Civil Statutes), is amended to read as follows:
    5-4        Sec. 5.  Obligations (including accrued interest) and credit
    5-5  agreements may from time to time be refinanced, renewed, or
    5-6  refunded by the issuance of other obligations or credit agreements.
    5-7        SECTION 5.  Section 6, Chapter 656, Acts of the 68th
    5-8  Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
    5-9  Civil Statutes), is amended to read as follows:
   5-10        Sec. 6.  Preliminary to the issuance and delivery of
   5-11  obligations or a credit agreement executed under this Act, the
   5-12  proceedings of the issuer<, the resolution, order, or ordinance>
   5-13  authorizing the issuance, execution, and delivery of any
   5-14  obligations, any <thereof, together with any> credit agreements,
   5-15  and any contracts providing revenues or security to pay the
   5-16  obligations or credit agreements<,> shall be submitted to the
   5-17  attorney general for his review.  If the attorney general shall
   5-18  find that such credit agreement or agreements, if any, contracts,
   5-19  if any, and other authorizing proceedings conform to the
   5-20  requirements of the Texas Constitution and this Act, the attorney
   5-21  general shall approve them.  Thereafter, the obligations and the
   5-22  credit agreements authorized therein may be executed and delivered,
   5-23  exchanged, or refinanced from time to time in accordance with the
   5-24  authorizing proceedings.  Upon such approval by the attorney
   5-25  general and initial delivery of any obligations so authorized, any
   5-26  such credit agreements, any such contracts providing revenues or
   5-27  security, such initial obligations and all other obligations
    6-1  thereafter issued pursuant to the authorizing proceedings, shall be
    6-2  incontestable for any cause in any court or other forum and shall
    6-3  be valid and binding obligations enforceable in accordance with
    6-4  their respective terms and provisions.
    6-5        SECTION 6.  The importance of this legislation and the
    6-6  crowded condition of the calendars in both houses create an
    6-7  emergency and an imperative public necessity that the
    6-8  constitutional rule requiring bills to be read on three several
    6-9  days in each house be suspended, and this rule is hereby suspended,
   6-10  and that this Act take effect and be in force from and after its
   6-11  passage, and it is so enacted.