H.B. No. 2306
1-1 AN ACT
1-2 relating to the issuance of refunding bonds.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection (b), Section 2, Chapter 503, Acts of
1-5 the 54th Legislature, 1955 (Article 717k, Vernon's Texas Civil
1-6 Statutes), is amended to read as follows:
1-7 (b) An issuer shall have the right to deposit, or cause to
1-8 be deposited to the State Treasurer of the State of Texas a sum of
1-9 money equal to the principal amount of the bonds, notes, and other
1-10 evidences of indebtedness which it proposes to refund plus the
1-11 amount of interest which will accrue thereon calculated to the date
1-12 on which it is to become due or on which it may be redeemed,
1-13 together with the amount of contract premium if any, required for
1-14 redemption; the State Treasurer may charge reasonable fees and
1-15 expenses for services performed under this Act. <and concurrently
1-16 with such deposit shall pay to the State Treasurer for his services
1-17 and to reimburse him for his expenses in performing his duties
1-18 under this Act a sum of money equivalent to one-twentieth (1/20) of
1-19 one per cent (1%) of the principal amount of said bonds and
1-20 one-eighth (1/8) of one per cent (1%) of the interest to accrue on
1-21 all of said underlying obligations, and an additional amount of
1-22 money sufficient to pay the charges of the bank or trust company at
1-23 which the principal and interest of said underlying obligations are
2-1 payable for its services in paying such principal and interest.>
2-2 The State Treasurer may rely on a certificate by such issuer <city>
2-3 as to the amount of the charges made by such bank or trust company.
2-4 At the same time such issuer <city> shall deliver to the State
2-5 Treasurer a certified copy of the ordinance, order, or resolution
2-6 authorizing said underlying obligations, or a certified excerpt
2-7 therefrom, showing clearly the amounts and the date or dates on
2-8 which interest is due on such underlying obligations, the date when
2-9 the principal becomes subject to redemption, and the name and
2-10 address of the bank or trust company at which such principal and
2-11 interest must be paid. It shall be the duty of the State Treasurer
2-12 to accept such deposits, payments, and instruments, and safely to
2-13 keep and use such money for the purposes set forth in this Act and
2-14 for no other purpose, and no part of such money except that in
2-15 payment for his services and to reimburse his expenses in
2-16 performing such services shall be used by or for the State of Texas
2-17 or for any creditor of the State of Texas, nor shall such money be
2-18 commingled with any other money.
2-19 SECTION 2. Section 7, Chapter 503, Acts of the 54th
2-20 Legislature, 1955 (Article 717k, Vernon's Texas Civil Statutes), is
2-21 amended to read as follows:
2-22 Sec. 7. When the deposit of money required hereunder is
2-23 made with the State Treasurer in accordance with this Act, for any
2-24 obligations being refunded pursuant hereto, such deposit shall
2-25 constitute the making of firm banking and financial arrangements
3-1 for the discharge and final payment or redemption of the
3-2 obligations being refunded; provided, however, that, at the option
3-3 of and within the discretion of the issuer, provision may be made
3-4 in the proceedings authorizing the issuance of such refunding bonds
3-5 for the subordination thereof to the obligations being refunded,
3-6 but only in the manner and to the extent specifically provided in
3-7 said proceedings. <Notwithstanding any provisions of this Act to
3-8 the contrary, the fees to be paid the State Treasurer for his
3-9 services and expenses under this Act shall not exceed a maximum of
3-10 $1,000.> Immediately after the receipt thereof, and by the most
3-11 expeditious means, it shall be the duty of the State Treasurer to
3-12 forward to and deposit with the place of payment (paying agent) for
3-13 the obligations being refunded all of the money deposited with him
3-14 pursuant hereto (excepting the fees for his services). If there is
3-15 more than one place of payment for the obligations being refunded,
3-16 the State Treasurer shall forward the aforesaid money directly to
3-17 the one of said places of payment which is located in the State of
3-18 Texas; provided that if more than one of such places of payment is
3-19 located in the State of Texas, or if no place of payment is located
3-20 in the State of Texas and there is more than one place of payment
3-21 located outside of the State of Texas, then said money shall be
3-22 forwarded directly to the one of such places of payment having the
3-23 largest capital and surplus. It shall be the duty of the place of
3-24 payment to deposit the aforesaid money received from the State
3-25 Treasurer (excepting the amount thereof representing the charges of
4-1 the place of payment) into an interest and sinking fund to be
4-2 established and maintained in trust and as a trust fund for the
4-3 payment of the obligations being refunded. Further, it shall be
4-4 the duty of the place of payment, out of said interest and sinking
4-5 fund, to pay or redeem the obligations being refunded when duly
4-6 presented therefor at the maturity, due date, or redemption date
4-7 thereof. If there is more than one place of payment, the one
4-8 having the deposit shall make appropriate financial arrangements so
4-9 that the necessary funds will be available at the other place or
4-10 places of payment to pay or redeem any of such obligations being
4-11 refunded when so presented for payment or redemption. The holder
4-12 or holders of any obligations being refunded by any refunding bonds
4-13 issued and sold under this Act shall not have the right to demand
4-14 or receive payment thereof at any time before the scheduled
4-15 maturity date or dates, due date or dates, or redemption date or
4-16 dates, respectively, of said obligations being refunded, unless the
4-17 governing body of the issuer shall have specifically and
4-18 affirmatively provided for and authorized the earlier payment of
4-19 said obligations in the proceedings authorizing said refunding
4-20 bonds.
4-21 SECTION 3. The importance of this legislation and the
4-22 crowded condition of the calendars in both houses create an
4-23 emergency and an imperative public necessity that the
4-24 constitutional rule requiring bills to be read on three several
4-25 days in each house be suspended, and this rule is hereby suspended,
5-1 and that this Act take effect and be in force from and after its
5-2 passage, and it is so enacted.