By Romo H.B. No. 152
74R1290 RJA-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the abolition of the Texas Public Finance Authority and
1-3 the Bond Review Board and the transfer of their powers and duties
1-4 to the Office of Debt Management; creating the Office of Debt
1-5 Management and authorizing the office as a central agency to issue
1-6 certain bonds.
1-7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-8 SECTION 1. Section 1, Texas Public Finance Authority Act
1-9 (Article 601d, Vernon's Texas Civil Statutes), is amended to read
1-10 as follows:
1-11 Sec. 1. Short Title. This Act may be cited as the Texas
1-12 Debt Management <Public Finance Authority> Act.
1-13 SECTION 2. Section 1A, Texas Public Finance Authority Act
1-14 (Article 601d, Vernon's Texas Civil Statutes), is amended to read
1-15 as follows:
1-16 Sec. 1A. Definitions. In this Act:
1-17 (1) "Authority" means the Office of Debt Management
1-18 <Texas Public Finance Authority>.
1-19 (2) "Board" means the governing board of <directors
1-20 of> the authority.
1-21 (3) "Building" means the physical structure used by a
1-22 state agency to conduct official state business and the major
1-23 equipment or personal property that is functionally related to the
1-24 physical structure.
2-1 (4) "Commission" means the <State Purchasing and>
2-2 General Services Commission.
2-3 (5) "Computer equipment" means telecommunications
2-4 devices or systems, automated information systems, the computers on
2-5 which information systems are automated, and computer software.
2-6 (6) "Construction" means the erection, improvement,
2-7 repair, renovation, and remodeling of a building.
2-8 (7) "Equipment" means fixed assets, other than land or
2-9 buildings, used by a state agency to conduct official state
2-10 business. The term includes computer equipment.
2-11 (8) "Obligations" means bonds, notes, certificates of
2-12 participation, certificates of obligation, and interests in
2-13 contracts.
2-14 (9) "State agency" means a board, commission,
2-15 department, office, agency, institution of higher education, or
2-16 other governmental entity in the executive, judicial, or
2-17 legislative branch of state government.
2-18 SECTION 3. Section 8, Texas Public Finance Authority Act
2-19 (Article 601d, Vernon's Texas Civil Statutes), is amended to read
2-20 as follows:
2-21 Sec. 8. STAFF; CONSULTANTS; CONTRACTS WITH BOND
2-22 PROFESSIONALS. (a) The board shall employ persons and contract
2-23 with consultants as necessary for the board to perform its
2-24 functions. Employees of the board are considered to be state
2-25 employees.
2-26 (b) The board may contract with bond professionals to
2-27 perform legal and financial services necessary to issue and sell
3-1 bonds if the board determines the contracts would be cost
3-2 effective. The board may also enter into one-year state contracts
3-3 with teams of bond professionals.
3-4 (c) To achieve certain cost efficiencies, the board shall
3-5 develop standard criteria for the selection of contracted bond
3-6 professionals.
3-7 SECTION 4. Section 9B, Texas Public Finance Authority Act
3-8 (Article 601d, Vernon's Texas Civil Statutes), is amended to read
3-9 as follows:
3-10 Sec. 9B. Authority to act as issuer. (a) With respect to
3-11 all bonds authorized to be issued by the Texas National Guard
3-12 Armory Board, Texas National Research Laboratory Commission, Parks
3-13 and Wildlife Department, and all institutions of higher education
3-14 authorized to issue bonds under Chapter 55, Education Code, or
3-15 Article VII, Section 17, of the Texas Constitution, the authority
3-16 has the exclusive authority to act on behalf of those entities in
3-17 issuing bonds on their behalf. In connection with those issuances
3-18 and with the issuance of refunding bonds on behalf of those
3-19 entities, the authority is subject to all rights, duties, and
3-20 conditions surrounding issuance previously applicable to the
3-21 issuing entity under the statute authorizing the issuance. All
3-22 references in an authorizing statute to the entity on whose behalf
3-23 the bonds are being issued apply equally to the authority in its
3-24 capacity as issuer on behalf of the entity.
3-25 (b) This section does not apply to The University of Texas
3-26 System, The Texas A&M University System, or a component of those
3-27 systems, <to an institution of higher education authorized to issue
4-1 bonds under Article VII, Section 17, of the Texas Constitution,> or
4-2 to bonds authorized to be issued by any of those systems or<,>
4-3 components<, or institutions>.
4-4 (c) The authority may issue bonds and notes for the benefit
4-5 of an institution of higher education eligible to issue bonds under
4-6 Article VII, Section 17, of the Texas Constitution, and pledge
4-7 money collected from the bonds and notes only as directed by the
4-8 governing board of the eligible institution.
4-9 (d) The board may charge a fee to state agencies and
4-10 institutions of higher education for services performed under this
4-11 Act.
4-12 SECTION 5. Subsections (a) and (c), Section 10A, Texas
4-13 Public Finance Authority Act (Article 601d, Vernon's Texas Civil
4-14 Statutes), as added by Chapter 896, Acts of the 71st Legislature,
4-15 Regular Session, 1989, are amended to read as follows:
4-16 (a) Before <When the authority submits its application for>
4-17 approval of a bond issue, <to> the <bond review> board shall
4-18 require<,> the agency or institution that will use the project to
4-19 be financed by the bonds to <shall> submit to the <bond review>
4-20 board a project analysis of the project. This section shall not
4-21 apply to Texas Department of Criminal Justice <Correction's> minor
4-22 renovation, repair, or construction projects as defined by the
4-23 department in cooperation with the <State Purchasing and> General
4-24 Services Commission.
4-25 (c) The <bond review> board may not approve the bond issue
4-26 unless a project analysis is submitted as provided by this section.
4-27 SECTION 6. Section 10B, Texas Public Finance Authority Act
5-1 (Article 601d, Vernon's Texas Civil Statutes), is amended to read
5-2 as follows:
5-3 Sec. 10B. REFUNDING OR REFINANCING; RATIFICATION OF CERTAIN
5-4 PROJECTS <BOND REVIEW BOARD APPROVAL>. (a) <The authority may not
5-5 issue bonds or obligations until the Bond Review Board has approved
5-6 the issuance under the provisions of Chapter 1078, Acts of the 70th
5-7 Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas
5-8 Civil Statutes).> Bonds and obligations issued under this Act <by
5-9 the authority> may be refunded or refinanced as determined by the
5-10 board <and approved by the Bond Review Board>.
5-11 (b) The projects authorized in Chapter 700, Acts of the 68th
5-12 Legislature, Regular Session, 1983, are ratified and confirmed.
5-13 SECTION 7. Section 13, Texas Public Finance Authority Act
5-14 (Article 601d, Vernon's Texas Civil Statutes), is amended by adding
5-15 Subsection (c) to read as follows:
5-16 (c) This section does not apply to bonds issued by an
5-17 institution of higher education under Article VII, Section 17, of
5-18 the Texas Constitution.
5-19 SECTION 8. Section 17(b), Texas Public Finance Authority Act
5-20 (Article 601d, Vernon's Texas Civil Statutes), is amended to read
5-21 as follows:
5-22 (b) The board may refund its revenue bonds and obligations
5-23 as provided by the general laws of the state for revenue bonds.
5-24 SECTION 9. Section 1, Chapter 696, Acts of the 70th
5-25 Legislature, Regular Session, 1987 (Article 601d-1, Vernon's Texas
5-26 Civil Statutes), is amended to read as follows:
5-27 Sec. 1. Definitions. In this Act:
6-1 (1) "Authority" means the Office of Debt Management
6-2 <Texas Public Building Authority>.
6-3 (2) "Board" or "review <means the board of directors
6-4 of the authority.>
6-5 <(3) "Review> board" means the governing board of the
6-6 Office of Debt Management <bond review board>.
6-7 SECTION 10. Section 2(a), Chapter 696, Acts of the 70th
6-8 Legislature, Regular Session, 1987 (Article 601d-1, Vernon's Texas
6-9 Civil Statutes), is amended to read as follows:
6-10 (a) The <bond review> board is composed of:
6-11 (1) the governor;
6-12 (2) the lieutenant governor;
6-13 (3) the speaker of the house of representatives;
6-14 (4) the State Treasurer; and
6-15 (5) the comptroller of public accounts.
6-16 SECTION 11. Section 5(g), Chapter 696, Acts of the 70th
6-17 Legislature, Regular Session, 1987 (Article 601d-1, Vernon's Texas
6-18 Civil Statutes), is amended to read as follows:
6-19 (g) Bonds issued under this section are subject to Sections
6-20 13, 14, 15, and 16, Texas Debt Management <Public Building
6-21 Authority> Act (Article 601d, Vernon's Texas Civil Statutes).
6-22 SECTION 12. Section 10, Chapter 696, Acts of the 70th
6-23 Legislature, Regular Session, 1987 (Article 601d-1, Vernon's Texas
6-24 Civil Statutes), is amended to read as follows:
6-25 Sec. 10. Authorization. Before the authority may issue and
6-26 sell bonds under this Act, the legislature by law must have
6-27 authorized the specific projects in this Act, the General
7-1 Appropriations Act, or the Texas Debt Management <Public Building
7-2 Authority> Act (Article 601d, Vernon's Texas Civil Statutes).
7-3 SECTION 13. Section 1, Chapter 1078, Acts of the 70th
7-4 Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas
7-5 Civil Statutes), is amended to read as follows:
7-6 Sec. 1. Definitions. In this Act:
7-7 (1) "Board" means the governing board of the office
7-8 <bond review board>.
7-9 (2) "Office" means the Office of Debt Management <bond
7-10 finance office>.
7-11 (3) "State bond" means:
7-12 (A) a bond or other obligation issued by:
7-13 (i) a state agency;
7-14 (ii) an entity expressly created by
7-15 statute and having statewide jurisdiction; or
7-16 (iii) any other entity issuing a bond or
7-17 other obligation on behalf of the state or on behalf of an entity
7-18 listed in Paragraph (i) or (ii) of this subdivision; or
7-19 (B) an installment sale or lease-purchase
7-20 obligation issued by or on behalf of an entity listed in Paragraph
7-21 (i), (ii), or (iii) of this subdivision that has a stated term of
7-22 longer than five years or has an initial principal amount of
7-23 greater than $250,000.
7-24 SECTION 14. Section 2, Chapter 1078, Acts of the 70th
7-25 Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas
7-26 Civil Statutes), is amended to read as follows:
7-27 Sec. 2. <BOND REVIEW> BOARD MEMBER DESIGNATION. <(a) The
8-1 bond review board is composed of:>
8-2 <(1) the governor;>
8-3 <(2) the lieutenant governor;>
8-4 <(3) the speaker of the house of representatives;>
8-5 <(4) the state treasurer; and>
8-6 <(5) the comptroller of public accounts.>
8-7 <(b)> A member of the board may designate another person to
8-8 act on the member's behalf.
8-9 <(c) The governor is chairman of the board.>
8-10 <(d) If the speaker of the house of representatives is not
8-11 permitted by the Texas Constitution to serve as a voting member of
8-12 the board, the speaker of the house of representatives serves as a
8-13 nonvoting member of the board.>
8-14 SECTION 15. Section 4, Chapter 1078, Acts of the 70th
8-15 Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas
8-16 Civil Statutes), is amended to read as follows:
8-17 Sec. 4. <BOND FINANCE> OFFICE DIRECTOR AND STAFF. The <bond
8-18 finance> office is managed by a director appointed by the <bond
8-19 review> board and a staff selected by the director. Whenever
8-20 practical, the office shall make use of the resources of the
8-21 Legislative Budget Board and the offices of the governor,
8-22 comptroller, and treasurer.
8-23 SECTION 16. Section 8(b), Chapter 1078, Acts of the 70th
8-24 Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas
8-25 Civil Statutes), is amended to read as follows:
8-26 (b) For purposes of this section, "state debt payable from
8-27 the general revenue fund" means general obligation and revenue
9-1 bonds, including authorized but unissued bonds, and lease-purchase
9-2 agreements in an amount greater than $250,000, which bonds or lease
9-3 purchase agreements are designed to be repaid with the general
9-4 revenues of the state. The term does not include bonds that,
9-5 although backed by the full faith or credit of the state, are
9-6 reasonably expected to be paid from other revenue sources and that
9-7 are not expected to create a general revenue draw. Bonds or lease
9-8 purchase agreements that pledge the full faith and credit of the
9-9 state will be considered to be reasonably expected to be paid from
9-10 other revenue sources if they are designed to receive revenues
9-11 other than state general revenues sufficient to cover their debt
9-12 service over the life of the bonds or agreement. In the event such
9-13 bonds or agreement, or any portion thereof, subsequently requires
9-14 use of the state's general revenue for payment, the bonds or
9-15 agreement, or such portion thereof, will be considered to be a
9-16 "state debt payable from the general revenue fund" within the
9-17 definition of this section, until one of the following events
9-18 occurs:
9-19 (1) the bonds or agreement are backed by insurance or
9-20 other form of guarantee that will ensure payment from other than
9-21 general revenue; or
9-22 (2) the issuer demonstrates to the satisfaction of the
9-23 <bond review> board that the bonds will no longer require a general
9-24 revenue draw, and the <bond review> board so certifies to the
9-25 Legislative Budget Board.
9-26 SECTION 17. (a) Sections 3, 4, 5, 6, 7, 21, 31, and 32,
9-27 Texas Public Finance Authority Act (Article 601d, Vernon's Texas
10-1 Civil Statutes), are repealed.
10-2 (b) Section 7(b), Chapter 1078, Acts of the 70th
10-3 Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas
10-4 Civil Statutes), is repealed.
10-5 SECTION 18. (a) A statutory reference to the Texas Public
10-6 Finance Authority means the Office of Debt Management. A statutory
10-7 reference to the board of directors of the Texas Public Finance
10-8 Authority means the governing board of the Office of Debt
10-9 Management.
10-10 (b) A statutory reference to the Bond Review Board means the
10-11 governing board of the Office of Debt Management.
10-12 (c) A statutory reference to the Texas Public Finance
10-13 Authority Act (Article 601d, Vernon's Texas Civil Statutes) means
10-14 the Texas Debt Management Act (Article 601d, Vernon's Texas Civil
10-15 Statutes).
10-16 SECTION 19. (a) On the effective date of this Act, all
10-17 functions of the Texas Public Finance Authority and the Bond Review
10-18 Board are transferred to the Office of Debt Management. The Texas
10-19 Public Finance Authority and the Bond Review Board shall coordinate
10-20 the transfer of administration to the Office of Debt Management as
10-21 soon as practicable on or after the effective date of this Act.
10-22 (b) The transfer required by Subsection (a) of this section
10-23 includes all assets, obligations, and liabilities of any kind,
10-24 including all contracts, leases, real or personal property,
10-25 furniture, computers, and other equipment, files, and related
10-26 material of the Texas Public Finance Authority or the Bond Review
10-27 Board.
11-1 (c) The staffs of the Texas Public Finance Authority and the
11-2 Bond Review Board are transferred to the Office of Debt Management.
11-3 (d) Appropriations made to the Bond Review Board are
11-4 transferred to the Office of Debt Management. Appropriations made
11-5 to the Texas Public Finance Authority for debt service are
11-6 transferred to the Office of Debt Management. The legislature
11-7 shall appropriate additional amounts as necessary for the office to
11-8 perform its statutory functions.
11-9 (e) Out of the funds allocated to eligible institutions of
11-10 higher education under Article VII, Section 17, of the Texas
11-11 Constitution, the comptroller shall transfer to the Office of Debt
11-12 Management amounts necessary to pay debt service on bonds and notes
11-13 issued on behalf of the respective institutions.
11-14 SECTION 20. This Act does not rededicate or reestablish a
11-15 fund or source of funding that has been abolished, merged, or
11-16 grouped with other funds under Section 403.094, Government Code.
11-17 SECTION 21. This Act takes effect September 1, 1995.
11-18 SECTION 22. The importance of this legislation and the
11-19 crowded condition of the calendars in both houses create an
11-20 emergency and an imperative public necessity that the
11-21 constitutional rule requiring bills to be read on three several
11-22 days in each house be suspended, and this rule is hereby suspended.