1-1 By: Turner of Harris (Senate Sponsor - Ellis) H.B. No. 2306
1-2 (In the Senate - Received from the House April 26, 1993;
1-3 April 27, 1993, read first time and referred to Committee on
1-4 Economic Development; April 27, 1993, reported favorably by the
1-5 following vote: Yeas 7, Nays 0; April 27, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Parker x
1-9 Lucio x
1-10 Ellis x
1-11 Haley x
1-12 Harris of Dallas x
1-13 Harris of Tarrant x
1-14 Leedom x
1-15 Madla x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to the issuance of refunding bonds.
1-22 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-23 SECTION 1. Subsection (b), Section 2, Chapter 503, Acts of
1-24 the 54th Legislature, 1955 (Article 717k, Vernon's Texas Civil
1-25 Statutes), is amended to read as follows:
1-26 (b) An issuer shall have the right to deposit, or cause to
1-27 be deposited to the State Treasurer of the State of Texas a sum of
1-28 money equal to the principal amount of the bonds, notes, and other
1-29 evidences of indebtedness which it proposes to refund plus the
1-30 amount of interest which will accrue thereon calculated to the date
1-31 on which it is to become due or on which it may be redeemed,
1-32 together with the amount of contract premium if any, required for
1-33 redemption; the State Treasurer may charge reasonable fees and
1-34 expenses for services performed under this Act. <and concurrently
1-35 with such deposit shall pay to the State Treasurer for his services
1-36 and to reimburse him for his expenses in performing his duties
1-37 under this Act a sum of money equivalent to one-twentieth (1/20) of
1-38 one per cent (1%) of the principal amount of said bonds and
1-39 one-eighth (1/8) of one per cent (1%) of the interest to accrue on
1-40 all of said underlying obligations, and an additional amount of
1-41 money sufficient to pay the charges of the bank or trust company at
1-42 which the principal and interest of said underlying obligations are
1-43 payable for its services in paying such principal and interest.>
1-44 The State Treasurer may rely on a certificate by such issuer <city>
1-45 as to the amount of the charges made by such bank or trust company.
1-46 At the same time such issuer <city> shall deliver to the State
1-47 Treasurer a certified copy of the ordinance, order, or resolution
1-48 authorizing said underlying obligations, or a certified excerpt
1-49 therefrom, showing clearly the amounts and the date or dates on
1-50 which interest is due on such underlying obligations, the date when
1-51 the principal becomes subject to redemption, and the name and
1-52 address of the bank or trust company at which such principal and
1-53 interest must be paid. It shall be the duty of the State Treasurer
1-54 to accept such deposits, payments, and instruments, and safely to
1-55 keep and use such money for the purposes set forth in this Act and
1-56 for no other purpose, and no part of such money except that in
1-57 payment for his services and to reimburse his expenses in
1-58 performing such services shall be used by or for the State of Texas
1-59 or for any creditor of the State of Texas, nor shall such money be
1-60 commingled with any other money.
1-61 SECTION 2. Section 7, Chapter 503, Acts of the 54th
1-62 Legislature, 1955 (Article 717k, Vernon's Texas Civil Statutes), is
1-63 amended to read as follows:
1-64 Sec. 7. When the deposit of money required hereunder is
1-65 made with the State Treasurer in accordance with this Act, for any
1-66 obligations being refunded pursuant hereto, such deposit shall
1-67 constitute the making of firm banking and financial arrangements
1-68 for the discharge and final payment or redemption of the
2-1 obligations being refunded; provided, however, that, at the option
2-2 of and within the discretion of the issuer, provision may be made
2-3 in the proceedings authorizing the issuance of such refunding bonds
2-4 for the subordination thereof to the obligations being refunded,
2-5 but only in the manner and to the extent specifically provided in
2-6 said proceedings. <Notwithstanding any provisions of this Act to
2-7 the contrary, the fees to be paid the State Treasurer for his
2-8 services and expenses under this Act shall not exceed a maximum of
2-9 $1,000.> Immediately after the receipt thereof, and by the most
2-10 expeditious means, it shall be the duty of the State Treasurer to
2-11 forward to and deposit with the place of payment (paying agent) for
2-12 the obligations being refunded all of the money deposited with him
2-13 pursuant hereto (excepting the fees for his services). If there is
2-14 more than one place of payment for the obligations being refunded,
2-15 the State Treasurer shall forward the aforesaid money directly to
2-16 the one of said places of payment which is located in the State of
2-17 Texas; provided that if more than one of such places of payment is
2-18 located in the State of Texas, or if no place of payment is located
2-19 in the State of Texas and there is more than one place of payment
2-20 located outside of the State of Texas, then said money shall be
2-21 forwarded directly to the one of such places of payment having the
2-22 largest capital and surplus. It shall be the duty of the place of
2-23 payment to deposit the aforesaid money received from the State
2-24 Treasurer (excepting the amount thereof representing the charges of
2-25 the place of payment) into an interest and sinking fund to be
2-26 established and maintained in trust and as a trust fund for the
2-27 payment of the obligations being refunded. Further, it shall be
2-28 the duty of the place of payment, out of said interest and sinking
2-29 fund, to pay or redeem the obligations being refunded when duly
2-30 presented therefor at the maturity, due date, or redemption date
2-31 thereof. If there is more than one place of payment, the one
2-32 having the deposit shall make appropriate financial arrangements so
2-33 that the necessary funds will be available at the other place or
2-34 places of payment to pay or redeem any of such obligations being
2-35 refunded when so presented for payment or redemption. The holder
2-36 or holders of any obligations being refunded by any refunding bonds
2-37 issued and sold under this Act shall not have the right to demand
2-38 or receive payment thereof at any time before the scheduled
2-39 maturity date or dates, due date or dates, or redemption date or
2-40 dates, respectively, of said obligations being refunded, unless the
2-41 governing body of the issuer shall have specifically and
2-42 affirmatively provided for and authorized the earlier payment of
2-43 said obligations in the proceedings authorizing said refunding
2-44 bonds.
2-45 SECTION 3. The importance of this legislation and the
2-46 crowded condition of the calendars in both houses create an
2-47 emergency and an imperative public necessity that the
2-48 constitutional rule requiring bills to be read on three several
2-49 days in each house be suspended, and this rule is hereby suspended,
2-50 and that this Act take effect and be in force from and after its
2-51 passage, and it is so enacted.
2-52 * * * * *
2-53 Austin,
2-54 Texas
2-55 April 27, 1993
2-56 Hon. Bob Bullock
2-57 President of the Senate
2-58 Sir:
2-59 We, your Committee on Economic Development to which was referred
2-60 H.B. No. 2306, have had the same under consideration, and I am
2-61 instructed to report it back to the Senate with the recommendation
2-62 that it do pass and be printed.
2-63 Parker,
2-64 Chairman
2-65 * * * * *
2-66 WITNESSES
2-67 No witnesses appeared on H.B. No. 2306