By: Harris, Ike S.B. No. 1082
73R4502 DWS-F
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.