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