1-1 By: Leedom S.B. No. 63
1-2 (In the Senate - Filed December 16, 1992; January 13, 1993,
1-3 read first time and referred to Committee on Intergovernmental
1-4 Relations; February 18, 1993, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 10, Nays 0;
1-6 February 18, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Armbrister x
1-10 Leedom x
1-11 Carriker x
1-12 Henderson x
1-13 Madla x
1-14 Moncrief x
1-15 Patterson x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 Whitmire x
1-20 COMMITTEE SUBSTITUTE FOR S.B. No. 63 By: Leedom
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the issuance of anticipation notes by counties and
1-24 municipalities.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Chapter 1, Title 22, Revised Statutes, is amended
1-27 by adding Article 717w to read as follows:
1-28 Art. 717w. ANTICIPATION NOTES
1-29 Sec. 1. DEFINITIONS. In this article:
1-30 (1) "Amount available" includes cash, marketable
1-31 securities, or money in an account that, without legislative or
1-32 judicial action, may be used to pay an issuer's anticipated
1-33 expenditures. The term does not include:
1-34 (A) money in an account that is subject to a
1-35 legislative, judicial, or contractual requirement that the account
1-36 be reimbursed; or
1-37 (B) the proceeds of an anticipation note issued
1-38 under this article.
1-39 (2) "Anticipated expenditure" means an expenditure
1-40 that is payable from anticipated tax or other revenue.
1-41 (3) "Anticipation note" means a note issued under this
1-42 article.
1-43 (4) "Cash reserve" means an amount reasonably required
1-44 by an issuer for the payment of unanticipated expenditures. For
1-45 purposes of this article, an amount equal to one month's
1-46 anticipated expenditures is presumed to be reasonably required as a
1-47 cash reserve.
1-48 (5) "Cumulative cash flow deficit" means, for the
1-49 period for which the amount is determined, the amount by which the
1-50 sum of an issuer's anticipated expenditures plus the issuer's cash
1-51 reserve exceeds the amount available for payment of the anticipated
1-52 expenditures.
1-53 (6) "Governing body" means the board, council,
1-54 commission, court, or other body or group authorized to issue
1-55 anticipation notes for or on behalf of an issuer.
1-56 (7) "Issuer" means a municipality or county.
1-57 Sec. 2. CONFLICT WITH OTHER LAW. If there is a conflict
1-58 between this article and another statute, the issuer may use either
1-59 provision, and it is not necessary for the governing body to
1-60 designate the law under which the action is being taken.
1-61 Sec. 3. PURPOSES FOR WHICH ANTICIPATION NOTES MAY BE
1-62 AUTHORIZED. The commissioners court of a county on recommendation
1-63 of the county auditor or budget officer, if applicable, and the
1-64 governing body of a municipality may authorize anticipation notes
1-65 to:
1-66 (1) pay a contractual obligation incurred or to be
1-67 incurred for the construction of any public work;
1-68 (2) pay a contractual obligation incurred or to be
2-1 incurred for the purchase of materials, supplies, equipment,
2-2 machinery, buildings, lands, and rights-of-way for authorized needs
2-3 and purposes;
2-4 (3) pay a contractual obligation incurred or to be
2-5 incurred for professional services, including services provided by
2-6 tax appraisal engineers, engineers, architects, attorneys,
2-7 mapmakers, auditors, financial advisors, and fiscal agents;
2-8 (4) pay operating expenses or current expenses; or
2-9 (5) fund the issuer's cumulative cash flow deficit.
2-10 Sec. 4. ADDITIONAL AUTHORITY FOR COUNTIES AND CERTAIN
2-11 MUNICIPALITIES. (a) This section applies only to:
2-12 (1) a county; or
2-13 (2) a home-rule municipality that has a population of
2-14 90,000 or more, according to the most recent federal census.
2-15 (b) Notwithstanding anything in this article to the
2-16 contrary, the governing body of an issuer described by Subsection
2-17 (a) of this section may exercise the authority granted to the
2-18 governing body of an issuer with regard to issuance of obligations
2-19 under Chapter 656, Acts of the 68th Legislature, Regular Session,
2-20 1983 (Article 717q, Vernon's Texas Civil Statutes), except that the
2-21 prohibition in that Act on the repayment of an obligation with
2-22 funds derived from ad valorem taxation does not apply to an issuer
2-23 exercising the authority granted under this section.
2-24 Sec. 5. AUTHORIZATION OF ANTICIPATION NOTES BY ORDINANCE OR
2-25 ORDER. Anticipation notes may be authorized by an ordinance
2-26 adopted by the governing body of a municipality or by an order
2-27 adopted by the governing body of a county.
2-28 Sec. 6. RESTRICTIONS ON ANTICIPATION NOTES. (a) Except as
2-29 provided by Subsection (b) of this section, anticipation notes
2-30 issued under this article are subject to:
2-31 (1) Chapter 503, Acts of the 54th Legislature, 1955
2-32 (Article 717k, Vernon's Texas Civil Statutes);
2-33 (2) Chapter 3, Acts of the 61st Legislature, Regular
2-34 Session, 1969 (Article 717k-2, Vernon's Texas Civil Statutes);
2-35 (3) Chapter 784, Acts of the 61st Legislature, Regular
2-36 Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes);
2-37 (4) the Bond Procedures Act of 1981 (Article 717k-6,
2-38 Vernon's Texas Civil Statutes);
2-39 (5) Sections 3.001 through 3.003, Chapter 53, Acts of
2-40 the 70th Legislature, 2nd Called Session, 1987 (Article 717k-8,
2-41 Vernon's Texas Civil Statutes); and
2-42 (6) Chapter 400, Acts of the 66th Legislature, 1979
2-43 (Article 717m-1, Vernon's Texas Civil Statutes).
2-44 (b) Chapter 656, Acts of the 68th Legislature, Regular
2-45 Session, 1983 (Article 717q, Vernon's Texas Civil Statutes),
2-46 governs approval by the attorney general of anticipation notes
2-47 issued under Section 4 of this article.
2-48 (c) A governing body may not issue anticipation notes that
2-49 are to be payable from bonds secured by ad valorem taxes to be
2-50 issued in the future unless the bonds have been approved by the
2-51 voters in an election held by the issuer.
2-52 (d) A governing body may not use proceeds from the sale of
2-53 anticipation notes to repay interfund or other borrowing that
2-54 occurred more than 12 months before the date of the ordinance or
2-55 order authorizing the issuance of the notes.
2-56 (e) Anticipation notes issued for a purpose described by
2-57 Subdivision (1), (2), or (3) of Section 3 of this article must
2-58 mature before the seventh anniversary of the date that the attorney
2-59 general approves the notes.
2-60 (f) Anticipation notes issued for a purpose described in
2-61 Subdivision (4) or (5) of Section 3 of this article must mature
2-62 before the first anniversary of the date that the attorney general
2-63 approves the notes.
2-64 (g) Anticipation notes issued under Subdivision (4) of
2-65 Section 3 of this article may not exceed 75 percent of the revenues
2-66 or taxes anticipated to be collected in the fiscal year in which
2-67 the attorney general approves the notes.
2-68 Sec. 7. PROVISIONS IN ANTICIPATION NOTES. The governing
2-69 body may:
2-70 (1) make the notes payable at the times and places
3-1 determined by the governing body;
3-2 (2) issue the notes in forms and one or more
3-3 denominations, either in coupon form or registered as to principal
3-4 and interest, or both;
3-5 (3) make the notes contain options for redemption
3-6 before the scheduled maturity; and
3-7 (4) make the notes contain other provisions the
3-8 governing body desires.
3-9 Sec. 8. SALE OF ANTICIPATION NOTES. The governing body may
3-10 sell anticipation notes at public or private sale for cash.
3-11 Sec. 9. SOURCE OF PAYMENT. (a) The governing body may
3-12 provide that anticipation notes will be paid from and secured by
3-13 revenues, taxes, or the proceeds of bonds to be issued by the
3-14 issuer.
3-15 (b) The governing body may pledge to the payment of
3-16 anticipation notes revenues, taxes, or the proceeds of bonds to be
3-17 issued by the issuer. If an ad valorem tax to be assessed and
3-18 collected in a subsequent fiscal year is pledged to the payment of
3-19 anticipation notes, the governing body of the issuer shall levy the
3-20 tax in the ordinance or order that authorizes the issuance of the
3-21 notes.
3-22 SECTION 2. This Act takes effect September 1, 1993.
3-23 SECTION 3. The importance of this legislation and the
3-24 crowded condition of the calendars in both houses create an
3-25 emergency and an imperative public necessity that the
3-26 constitutional rule requiring bills to be read on three several
3-27 days in each house be suspended, and this rule is hereby suspended.
3-28 * * * * *
3-29 Austin,
3-30 Texas
3-31 February 18,
3-32 1993
3-33 Hon. Bob Bullock
3-34 President of the Senate
3-35 Sir:
3-36 We, your Committee on Intergovernmental Relations to which was
3-37 referred S.B. No. 63, have had the same under consideration, and I
3-38 am instructed to report it back to the Senate with the
3-39 recommendation that it do not pass, but that the Committee
3-40 Substitute adopted in lieu thereof do pass and be printed.
3-41 Armbrister,
3-42 Chairman
3-43 * * * * *
3-44 WITNESSES
3-45 FOR AGAINST ON
3-46 ___________________________________________________________________
3-47 Name: Bill Melton x
3-48 Representing: Dallas County
3-49 City: Dallas
3-50 -------------------------------------------------------------------
3-51 Name: Connie T. Maxwell x
3-52 Representing: GFOAT, TML
3-53 City: Lewisville
3-54 -------------------------------------------------------------------
3-55 Name: John Longstreet x
3-56 Representing: City of Plano
3-57 City: Plano
3-58 -------------------------------------------------------------------
3-59 Name: Joe Paniagua x
3-60 Representing: City of Fort Worth
3-61 City: Fort Worth
3-62 -------------------------------------------------------------------
3-63 FOR AGAINST ON
3-64 ___________________________________________________________________
3-65 Name: Pasco Parker x
3-66 Representing: Tx assoc. county auditors
3-67 City: McKinney
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