S.B. No. 1273
AN ACT
1-1 relating to the issuance of obligations by certain issuers and the
1-2 execution of credit agreements relating to the obligations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subdivisions (1), (3), and (6), Section 1,
1-5 Chapter 656, Acts of the 68th Legislature, Regular Session, 1983
1-6 (Article 717q, Vernon's Texas Civil Statutes), are amended to read
1-7 as follows:
1-8 (1) "Issuer" means (A) any incorporated city
1-9 operating under a home-rule charter adopted pursuant to Article XI,
1-10 Section 5, of the Constitution of Texas having a population
1-11 according to the latest federal decennial census of 90,000 or more
1-12 and having outstanding long-term debt secured by the revenues of
1-13 the public utility for which the obligations are being issued which
1-14 is rated by a nationally recognized rating agency for municipal
1-15 securities in one of the four highest rating categories for
1-16 long-term obligations; (B) any conservation and reclamation
1-17 district created and organized as a river authority under and
1-18 pursuant to Article III, Section 52, or Article XVI, Section 59, of
1-19 the Constitution of Texas and by an act of the legislature of the
1-20 State of Texas; (C) any joint powers agency organized and
1-21 operating pursuant to Chapter 166, Acts of the 63rd Legislature,
1-22 Regular Session, 1973 (Article 1435a, Revised Statutes); (D) any
1-23 metropolitan rapid transit authority or regional transportation
2-1 authority created, organized, and operating pursuant to Chapter
2-2 141, Acts of the 63rd Legislature, Regular Session, 1973 (Article
2-3 1118x, Revised Statutes) or Chapter 683, Acts of the 66th
2-4 Legislature, Regular Session, 1979 (Article 1118y, Revised
2-5 Statutes); (E) any conservation and reclamation district organized
2-6 or operating as a navigation district under and pursuant to Article
2-7 III, Section 52, or Article XVI, Section 59, of the Constitution of
2-8 Texas; (F) any district organized or operating under and pursuant
2-9 to Article XVI, Section 59, of the Constitution of Texas which has
2-10 all or part of two or more incorporated cities within its
2-11 boundaries; (G) agencies of the State of Texas (including the
2-12 governing boards of the state institutions of higher education);
2-13 <and> (H) any hospital authority in a county with a population of
2-14 more than 2 million, according to the most recent federal census,
2-15 that was created or is operating under Chapter 262, Health and
2-16 Safety Code, or Chapter 264, Health and Safety Code; and (I) any
2-17 nonprofit corporation organized to exercise the powers of a higher
2-18 education authority under Subsection (e), Section 53.47, Education
2-19 Code.
2-20 (3) "Eligible project" means:
2-21 (A) the acquisition or construction of and
2-22 improvements, additions, or extensions to a public utility, one or
2-23 more, including capital assets and facilities incident and related
2-24 to the operation, maintenance, and administration thereof, and,
2-25 with respect to properties and facilities for (1) <(A)> the
3-1 generation of electric power and energy, fuel acquisition, or
3-2 development or facilities for the transportation thereof;
3-3 (2) <(B)> a public transportation system, buildings, structures,
3-4 terminals, rolling stock, garages, shops, equipment, and other
3-5 facilities (including vehicle parking areas and facilities
3-6 necessary or convenient for the beneficial use and access of
3-7 persons and vehicles to stations, terminals, yards, cars, and buses
3-8 or for the protection and environmental enhancement of such
3-9 facilities) for mass public transportation; and (3) <(C)> a port
3-10 facility, wharves, docks, warehouses, grain elevators, other
3-11 storage facilities, bunkering facilities, port-related railroads
3-12 and bridges, floating plants and facilities, lightering facilities,
3-13 cargo handling facilities, towing facilities, and all other
3-14 facilities or aids incident to or useful in the operation of a port
3-15 facility; and
3-16 (B) a project for which an issuer is authorized
3-17 to issue revenue bonds secured, in whole or in part, by revenues
3-18 derived from or related to student loans.
3-19 (6) "Credit agreement" means loan agreement, revolving
3-20 credit agreement, agreement establishing a line of credit, letter
3-21 of credit, reimbursement agreement, insurance contract, commitments
3-22 to purchase obligations, purchase or sale agreements, interest rate
3-23 swap agreement, or commitments or other contracts or agreements
3-24 authorized and approved by the governing body of an issuer in
3-25 connection with the authorization, issuance, security, exchange,
4-1 payment, purchase, or redemption of obligations and/or interest
4-2 thereon.
4-3 SECTION 2. Subsection (a), Section 2, Chapter 656, Acts of
4-4 the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's
4-5 Texas Civil Statutes), is amended to read as follows:
4-6 (a) The governing body of an issuer is hereby authorized and
4-7 empowered to issue, sell, and deliver obligations and execute
4-8 credit agreements in relation thereto to finance project costs of
4-9 an eligible project, or to refund obligations issued in connection
4-10 with an eligible project, subject to the limitations contained
4-11 herein. Obligations shall be secured solely by (A) the proceeds
4-12 of sale of other obligations; (B) the proceeds of sale of revenue
4-13 bonds payable from the revenue to be received from a public utility
4-14 or a specified user of a public utility; (C) any revenues which
4-15 the issuer is authorized by any statute, city home-rule charter, or
4-16 constitutional provision to pledge to the payment of any
4-17 obligations; or (D) any one or more of such sources, including
4-18 credit agreements, all as the governing body of the issuer shall
4-19 provide in the resolution, order, or ordinance authorizing the
4-20 issuance of the obligations. Obligations shall be repaid from the
4-21 source or sources securing the payment thereof, funds received from
4-22 a credit agreement, or from any other revenues otherwise legally
4-23 available for the payment thereof, except funds derived from ad
4-24 valorem taxation. The governing body of an issuer may execute a
4-25 credit agreement in relation to the issuance, payment, sale,
5-1 resale, or exchange of obligations at any time, without regard to
5-2 whether a credit agreement was contemplated, authorized, or
5-3 executed in relation to the initial issuance, sale, and delivery of
5-4 the obligations.
5-5 SECTION 3. Section 4, Chapter 656, Acts of the 68th
5-6 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
5-7 Civil Statutes), is amended to read as follows:
5-8 Sec. 4. The governing body of an issuer may enter into
5-9 credit agreements at or after the issuance of obligations or in
5-10 conjunction with the <issuance,> payment, sale, resale, or exchange
5-11 of obligations to enhance the security for or provide for the
5-12 payment, redemption, or remarketing of the obligations and interest
5-13 on the obligations or to reduce the interest payable on the
5-14 obligations. A credit agreement is an agreement for professional
5-15 services and shall contain the terms and conditions and be for the
5-16 period that the governing body of the issuer approves. The cost to
5-17 the issuer of the credit agreement may be paid from the proceeds of
5-18 the sale of the obligations to which the credit agreement relates
5-19 or from any other source, including revenues of the issuer that are
5-20 available for the purpose of paying the obligations and the
5-21 interest on the obligations or that may otherwise be legally
5-22 available to make those payments.
5-23 SECTION 4. Section 5, Chapter 656, Acts of the 68th
5-24 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
5-25 Civil Statutes), is amended to read as follows:
6-1 Sec. 5. Obligations (including accrued interest) and credit
6-2 agreements may from time to time be refinanced, renewed, or
6-3 refunded by the issuance of other obligations and credit
6-4 agreements.
6-5 SECTION 5. Section 6, Chapter 656, Acts of the 68th
6-6 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
6-7 Civil Statutes), is amended to read as follows:
6-8 Sec. 6. Preliminary to the issuance and delivery of
6-9 obligations or the execution of credit agreements, the proceedings
6-10 of the issuer<, the resolution, order, or ordinance> authorizing
6-11 the issuance, execution, and delivery of the obligations, the
6-12 <thereof, together with any> credit agreements, and any contracts
6-13 providing revenues or security to pay the obligations or the credit
6-14 agreements, shall be submitted to the attorney general for his
6-15 review. If the attorney general shall find that such credit
6-16 agreement or agreements, if any, contracts, if any, and other
6-17 authorizing proceedings conform to the requirements of the Texas
6-18 Constitution and this Act, the attorney general shall approve them.
6-19 Thereafter, the obligations and credit agreements authorized
6-20 therein may be executed and delivered, exchanged, or refinanced
6-21 from time to time in accordance with the authorizing proceedings.
6-22 Upon such approval by the attorney general and initial delivery of
6-23 any obligations so authorized, any such credit agreements, any such
6-24 contracts providing revenues or security, such initial obligations
6-25 and all other obligations thereafter issued pursuant to the
7-1 authorizing proceedings, shall be incontestable for any cause in
7-2 any court or other forum and shall be valid and binding obligations
7-3 enforceable in accordance with their respective terms and
7-4 provisions.
7-5 SECTION 6. The importance of this legislation and the
7-6 crowded condition of the calendars in both houses create an
7-7 emergency and an imperative public necessity that the
7-8 constitutional rule requiring bills to be read on three several
7-9 days in each house be suspended, and this rule is hereby suspended,
7-10 and that this Act take effect and be in force from and after its
7-11 passage, and it is so enacted.