By: Duncan S.B. No. 721 A BILL TO BE ENTITLED AN ACT 1-1 relating to the issuance of certificates of obligation for the 1-2 payment of a municipality's contractual interests in certain 1-3 utilities. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Section 271.045, Local Government Code, is 1-6 amended by adding Subsections (c) and (d) to read as follows: 1-7 (c) The governing body of a municipality may issue 1-8 certificates of obligation to pay all or part of a municipality's 1-9 obligations incurred by contract for interests in and rights to 1-10 water or sewer treatment capacity in connection with a water supply 1-11 and transmission project or sewer treatment or collection project 1-12 to be constructed in whole or in part on behalf of the municipality 1-13 by another governmental entity or political subdivision pursuant to 1-14 a written agreement expressly authorized under Section 402.014 of 1-15 this code or Section 791.026, Government Code. 1-16 (d) In exercising its authority to issue certificates of 1-17 obligation for the purposes specified in Subsection (c), the 1-18 municipality must limit the principal amount of certificates to be 1-19 issued for the purpose of funding its contractual obligations to an 1-20 amount equal to (i) the aggregate of the contractual payments or 1-21 the total costs allocated or attributed, under generally accepted 1-22 accounting principles, to the capital costs of the project, as 1-23 opposed to any maintenance or operating costs to be paid under the 2-1 written agreement or (ii) the total cost of the project multiplied 2-2 by the percentage of the nameplate capacity of the project acquired 2-3 or conveyed by the written agreement to the municipality, whichever 2-4 limitation is applicable to the contractual interests or rights 2-5 being conveyed or identified in the written agreement. 2-6 SECTION 2. The importance of this legislation and the 2-7 crowded condition of the calendars in both houses create an 2-8 emergency and an imperative public necessity that the 2-9 constitutional rule requiring bills to be read on three several 2-10 days in each house be suspended, and this rule is hereby suspended, 2-11 and that this Act take effect and be in force from and after its 2-12 passage, and it is so enacted.