By: Duncan S.B. No. 721 97S0424/1 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 or electrical generation capacity 1-11 in connection with a water supply and transmission project, 1-12 electrical power or transmission project, or sewer treatment or 1-13 collection project to be constructed in whole or in part on behalf 1-14 of the municipality by another governmental entity or political 1-15 subdivision pursuant to a written agreement expressly authorized 1-16 under Section 402.014 of this code or Section 791.026, Government 1-17 Code, or other similar statute now or hereafter enacted by the 1-18 legislature. 1-19 (d) In exercising its authority to issue certificates of 1-20 obligation for the purposes specified in Subsection (c), the 1-21 municipality must limit the principal amount of certificates to be 1-22 issued for the purpose of funding its contractual obligations to an 1-23 amount equal to (i) the aggregate of the contractual payments or 2-1 the total costs allocated or attributed, under generally accepted 2-2 accounting principles, to the capital costs of the project, as 2-3 opposed to any maintenance or operating costs to be paid under the 2-4 written agreement or (ii) the total cost of the project multiplied 2-5 by the percentage of the nameplate capacity of the project acquired 2-6 or conveyed by the written agreement to the municipality, whichever 2-7 limitation is applicable to the contractual interests or rights 2-8 being conveyed or identified in the written agreement. 2-9 SECTION 2. The importance of this legislation and the 2-10 crowded condition of the calendars in both houses create an 2-11 emergency and an imperative public necessity that the 2-12 constitutional rule requiring bills to be read on three several 2-13 days in each house be suspended, and this rule is hereby suspended, 2-14 and that this Act take effect and be in force from and after its 2-15 passage, and it is so enacted.