1-1 By: Montford S.B. No. 1273
1-2 (In the Senate - Filed March 16, 1993; March 17, 1993, read
1-3 first time and referred to Committee on Finance; April 6, 1993,
1-4 reported adversely, with favorable Committee Substitute by the
1-5 following vote: Yeas 11, Nays 0; April 6, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Montford x
1-9 Turner x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Ellis x
1-14 Haley x
1-15 Moncrief x
1-16 Parker x
1-17 Ratliff x
1-18 Sims x
1-19 Truan x
1-20 Zaffirini x
1-21 COMMITTEE SUBSTITUTE FOR S.B. No. 1273 By: Montford
1-22 A BILL TO BE ENTITLED
1-23 AN ACT
1-24 relating to the issuance of obligations by certain issuers and the
1-25 execution of credit agreements relating to the obligations.
1-26 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-27 SECTION 1. Subdivisions (1), (3), and (6), Section 1,
1-28 Chapter 656, Acts of the 68th Legislature, Regular Session, 1983
1-29 (Article 717q, Vernon's Texas Civil Statutes), are amended to read
1-30 as follows:
1-31 (1) "Issuer" means (A) any incorporated city
1-32 operating under a home-rule charter adopted pursuant to Article XI,
1-33 Section 5, of the Constitution of Texas having a population
1-34 according to the latest federal decennial census of 90,000 or more
1-35 and having outstanding long-term debt secured by the revenues of
1-36 the public utility for which the obligations are being issued which
1-37 is rated by a nationally recognized rating agency for municipal
1-38 securities in one of the four highest rating categories for
1-39 long-term obligations; (B) any conservation and reclamation
1-40 district created and organized as a river authority under and
1-41 pursuant to Article III, Section 52, or Article XVI, Section 59, of
1-42 the Constitution of Texas and by an act of the legislature of the
1-43 State of Texas; (C) any joint powers agency organized and
1-44 operating pursuant to Chapter 166, Acts of the 63rd Legislature,
1-45 Regular Session, 1973 (Article 1435a, Revised Statutes); (D) any
1-46 metropolitan rapid transit authority or regional transportation
1-47 authority created, organized, and operating pursuant to Chapter
1-48 141, Acts of the 63rd Legislature, Regular Session, 1973 (Article
1-49 1118x, Revised Statutes) or Chapter 683, Acts of the 66th
1-50 Legislature, Regular Session, 1979 (Article 1118y, Revised
1-51 Statutes); (E) any conservation and reclamation district organized
1-52 or operating as a navigation district under and pursuant to Article
1-53 III, Section 52, or Article XVI, Section 59, of the Constitution of
1-54 Texas; (F) any district organized or operating under and pursuant
1-55 to Article XVI, Section 59, of the Constitution of Texas which has
1-56 all or part of two or more incorporated cities within its
1-57 boundaries; (G) agencies of the State of Texas (including the
1-58 governing boards of the state institutions of higher education);
1-59 <and> (H) any hospital authority in a county with a population of
1-60 more than 2 million, according to the most recent federal census,
1-61 that was created or is operating under Chapter 262, Health and
1-62 Safety Code, or Chapter 264, Health and Safety Code; and (I) any
1-63 nonprofit corporation organized to exercise the powers of a higher
1-64 education authority under Subsection (e), Section 53.47, Education
1-65 Code.
1-66 (3) "Eligible project" means:
1-67 (A) the acquisition or construction of and
1-68 improvements, additions, or extensions to a public utility, one or
2-1 more, including capital assets and facilities incident and related
2-2 to the operation, maintenance, and administration thereof, and,
2-3 with respect to properties and facilities for (1) <(A)> the
2-4 generation of electric power and energy, fuel acquisition, or
2-5 development or facilities for the transportation thereof;
2-6 (2) <(B)> a public transportation system, buildings, structures,
2-7 terminals, rolling stock, garages, shops, equipment, and other
2-8 facilities (including vehicle parking areas and facilities
2-9 necessary or convenient for the beneficial use and access of
2-10 persons and vehicles to stations, terminals, yards, cars, and buses
2-11 or for the protection and environmental enhancement of such
2-12 facilities) for mass public transportation; and (3) <(C)> a port
2-13 facility, wharves, docks, warehouses, grain elevators, other
2-14 storage facilities, bunkering facilities, port-related railroads
2-15 and bridges, floating plants and facilities, lightering facilities,
2-16 cargo handling facilities, towing facilities, and all other
2-17 facilities or aids incident to or useful in the operation of a port
2-18 facility; and
2-19 (B) a project for which an issuer is authorized
2-20 to issue revenue bonds secured, in whole or in part, by revenues
2-21 derived from or related to student loans.
2-22 (6) "Credit agreement" means loan agreement, revolving
2-23 credit agreement, agreement establishing a line of credit, letter
2-24 of credit, reimbursement agreement, insurance contract, commitments
2-25 to purchase obligations, purchase or sale agreements, interest rate
2-26 swap agreement, or commitments or other contracts or agreements
2-27 authorized and approved by the governing body of an issuer in
2-28 connection with the authorization, issuance, security, exchange,
2-29 payment, purchase, or redemption of obligations and/or interest
2-30 thereon.
2-31 SECTION 2. Subsection (a), Section 2, Chapter 656, Acts of
2-32 the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's
2-33 Texas Civil Statutes), is amended to read as follows:
2-34 (a) The governing body of an issuer is hereby authorized and
2-35 empowered to issue, sell, and deliver obligations and execute
2-36 credit agreements in relation thereto to finance project costs of
2-37 an eligible project, or to refund obligations issued in connection
2-38 with an eligible project, subject to the limitations contained
2-39 herein. Obligations shall be secured solely by (A) the proceeds
2-40 of sale of other obligations; (B) the proceeds of sale of revenue
2-41 bonds payable from the revenue to be received from a public utility
2-42 or a specified user of a public utility; (C) any revenues which
2-43 the issuer is authorized by any statute, city home-rule charter, or
2-44 constitutional provision to pledge to the payment of any
2-45 obligations; or (D) any one or more of such sources, including
2-46 credit agreements, all as the governing body of the issuer shall
2-47 provide in the resolution, order, or ordinance authorizing the
2-48 issuance of the obligations. Obligations shall be repaid from the
2-49 source or sources securing the payment thereof, funds received from
2-50 a credit agreement, or from any other revenues otherwise legally
2-51 available for the payment thereof, except funds derived from ad
2-52 valorem taxation. The governing body of an issuer may execute a
2-53 credit agreement in relation to the issuance, payment, sale,
2-54 resale, or exchange of obligations at any time, without regard to
2-55 whether a credit agreement was contemplated, authorized, or
2-56 executed in relation to the initial issuance, sale, and delivery of
2-57 the obligations.
2-58 SECTION 3. Section 4, Chapter 656, Acts of the 68th
2-59 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
2-60 Civil Statutes), is amended to read as follows:
2-61 Sec. 4. The governing body of an issuer may enter into
2-62 credit agreements at or after the issuance of obligations or in
2-63 conjunction with the <issuance,> payment, sale, resale, or exchange
2-64 of obligations to enhance the security for or provide for the
2-65 payment, redemption, or remarketing of the obligations and interest
2-66 on the obligations or to reduce the interest payable on the
2-67 obligations. A credit agreement is an agreement for professional
2-68 services and shall contain the terms and conditions and be for the
2-69 period that the governing body of the issuer approves. The cost to
2-70 the issuer of the credit agreement may be paid from the proceeds of
3-1 the sale of the obligations to which the credit agreement relates
3-2 or from any other source, including revenues of the issuer that are
3-3 available for the purpose of paying the obligations and the
3-4 interest on the obligations or that may otherwise be legally
3-5 available to make those payments.
3-6 SECTION 4. Section 5, Chapter 656, Acts of the 68th
3-7 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
3-8 Civil Statutes), is amended to read as follows:
3-9 Sec. 5. Obligations (including accrued interest) and credit
3-10 agreements may from time to time be refinanced, renewed, or
3-11 refunded by the issuance of other obligations and credit
3-12 agreements.
3-13 SECTION 5. Section 6, Chapter 656, Acts of the 68th
3-14 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
3-15 Civil Statutes), is amended to read as follows:
3-16 Sec. 6. Preliminary to the issuance and delivery of
3-17 obligations or the execution of credit agreements, the proceedings
3-18 of the issuer<, the resolution, order, or ordinance> authorizing
3-19 the issuance, execution, and delivery of the obligations, the
3-20 <thereof, together with any> credit agreements, and any contracts
3-21 providing revenues or security to pay the obligations or the credit
3-22 agreements, shall be submitted to the attorney general for his
3-23 review. If the attorney general shall find that such credit
3-24 agreement or agreements, if any, contracts, if any, and other
3-25 authorizing proceedings conform to the requirements of the Texas
3-26 Constitution and this Act, the attorney general shall approve them.
3-27 Thereafter, the obligations and credit agreements authorized
3-28 therein may be executed and delivered, exchanged, or refinanced
3-29 from time to time in accordance with the authorizing proceedings.
3-30 Upon such approval by the attorney general and initial delivery of
3-31 any obligations so authorized, any such credit agreements, any such
3-32 contracts providing revenues or security, such initial obligations
3-33 and all other obligations thereafter issued pursuant to the
3-34 authorizing proceedings, shall be incontestable for any cause in
3-35 any court or other forum and shall be valid and binding obligations
3-36 enforceable in accordance with their respective terms and
3-37 provisions.
3-38 SECTION 6. The importance of this legislation and the
3-39 crowded condition of the calendars in both houses create an
3-40 emergency and an imperative public necessity that the
3-41 constitutional rule requiring bills to be read on three several
3-42 days in each house be suspended, and this rule is hereby suspended,
3-43 and that this Act take effect and be in force from and after its
3-44 passage, and it is so enacted.
3-45 * * * * *
3-46 Austin,
3-47 Texas
3-48 April 6, 1993
3-49 Hon. Bob Bullock
3-50 President of the Senate
3-51 Sir:
3-52 We, your Committee on Finance to which was referred S.B. No. 1273,
3-53 have had the same under consideration, and I am instructed to
3-54 report it back to the Senate with the recommendation that it do not
3-55 pass, but that the Committee Substitute adopted in lieu thereof do
3-56 pass and be printed.
3-57 Montford,
3-58 Chairman
3-59 * * * * *
3-60 WITNESSES
3-61 FOR AGAINST ON
3-62 ___________________________________________________________________
3-63 Name: Murray Watson, Jr. x
3-64 Representing: Brazos Higher Education
3-65 City: Waco
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3-67 Name: Mark S. Westergard x
3-68 Representing: Self
3-69 City: Garland
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