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