R E S O L U T I O N
1-1 BE IT RESOLVED by the House of Representatives of the State
1-2 of Texas, 76th Legislature, Regular Session, 1999, That House Rule
1-3 13, Section 9(a), be suspended in part as provided by House Rule
1-4 13, Section 9(f), to enable the conference committee appointed to
1-5 resolve the differences between the house and senate versions of
1-6 S.B. No. 1520, relating to the authority of certain cities,
1-7 counties, districts, authorities, agencies, and nonprofit
1-8 corporations to enter into lease-leaseback transactions, to
1-9 consider and take action on the following matters:
1-10 (1) House Rule 13, Sections 9(a)(3) and (4), are suspended
1-11 to permit the committee to add a new section to the bill to read as
1-12 follows:
1-13 SECTION 1. Chapter 272, Local Government Code, is amended by
1-14 adding Section 272.004 to read as follows:
1-15 Sec. 272.004. TRANSFERS OF PROPERTY BY CERTAIN POLITICAL
1-16 SUBDIVISIONS. (a) In this section, "political subdivision" has
1-17 the same meaning as the term "issuer" under Section 1(1), Chapter
1-18 656, Acts of the 68th Legislature, Regular Session, 1983 (Article
1-19 717q, Vernon's Texas Civil Statutes).
1-20 (b) A political subdivision may sell, lease as a lessee or
1-21 lessor, or otherwise transfer property in the same manner as the
1-22 subregional board of a regional transportation authority under
1-23 Sections 452.108(d) and (e), Transportation Code.
1-24 (c) A sale, lease, or other transfer of property under this
2-1 section must be approved by a majority of the voters voting at an
2-2 election held within the boundaries of the political subdivision if
2-3 the agreement:
2-4 (1) involves the levy by the political subdivision of
2-5 a tax in an amount sufficient to make payments due under the
2-6 agreement; and
2-7 (2) is executed on or after September 1, 1999.
2-8 Explanation: This change is necessary to permit certain
2-9 political subdivisions to transfer property in the same manner as a
2-10 regional transportation authority under Sections 452.108(d) and
2-11 (e), Transportation Code.
2-12 (2) House Rule 13, Sections 9(a)(3) and (4), are suspended
2-13 to permit the committee to add a new section to the bill to read as
2-14 follows:
2-15 SECTION 2. Section 452.108(d), Transportation Code, is
2-16 amended to read as follows:
2-17 (d) To provide tax benefits to another party that are
2-18 available with respect to property under the laws of a foreign
2-19 country or to encourage private investment with a transportation
2-20 authority in the United States, and notwithstanding any other
2-21 provision of this chapter, an authority consisting of one subregion
2-22 governed by a subregional board created under Subchapter O may
2-23 enter into and execute, as it considers appropriate, contracts,
2-24 agreements, notes, security agreements, conveyances, bills of sale,
2-25 deeds, leases as lessee or lessor, and currency hedges, swap
2-26 transactions, or agreements relating to foreign and domestic
2-27 currency. The agreements or instruments may have the terms,
3-1 maturities, duration, provisions as to governing law, indemnities,
3-2 and other provisions that are approved by the subregional board.
3-3 In connection with any transaction authorized by this subsection,
3-4 the authority may [shall] deposit in trust, escrow, or similar
3-5 arrangement cash or lawful investments securities, or may [shall]
3-6 enter into one or more payment agreements, financial guarantees, or
3-7 insurance contracts with counterparties having either a corporate
3-8 credit or debt rating in any form, a claims-paying ability, or a
3-9 rating for financial strength of "AA" or better by Moody's
3-10 Investors Service, Inc. or by Standard & Poor's Corporation or of
3-11 "A (Class XII)" or better by Best's rating system, that by their
3-12 terms, including interest to be earned on the cash or securities,
3-13 or payment obligations, are sufficient in amount to pay when due
3-14 all amounts required to be paid by the authority as rent over the
3-15 full term of the transaction plus any optional purchase price or
3-16 other obligation due under the transaction. [A certification in
3-17 advance by an independent financial expert, banker, or certified
3-18 public accountant, who is not an employee of the authority,
3-19 certifying compliance with this requirement constitutes conclusive
3-20 evidence of compliance.]
3-21 Explanation: This change is necessary to permit certain
3-22 political subdivisions to enter into agreements that guarantee
3-23 payment of obligations due under certain transfers of property.
3-24 (3) House Rule 13, Sections 9(a)(3) and (4), are suspended
3-25 to permit the committee to add a new section to the bill to read as
3-26 follows:
3-27 SECTION 3. The change in law made by this Act applies only
4-1 to the sale, lease, or other transfer of property on or after the
4-2 effective date of this Act. The sale, lease, or other transfer of
4-3 property before the effective date of this Act is governed by the
4-4 law in effect immediately before the effective date, and that law
4-5 is continued in effect for that purpose.
4-6 Explanation: This change is necessary to implement the new
4-7 authority of certain political subdivisions to transfer property in
4-8 the same manner as a regional transportation authority under
4-9 Sections 452.108(d) and (e), Transportation Code.
4-10 (4) House Rule 13, Section 9(a)(2), is suspended to permit
4-11 the committee to omit the following section of the bill:
4-12 SECTION 1. Section 1, Chapter 656, Acts of the 68th
4-13 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
4-14 Civil Statutes), is amended by amending Subdivision (6) and adding
4-15 Subdivision (8) to read as follows:
4-16 (6) "Credit agreement" means lease-leaseback
4-17 agreements, loan agreement, revolving credit agreement, agreement
4-18 establishing a line of credit, letter of credit, reimbursement
4-19 agreement, insurance contract, commitments to purchase obligations,
4-20 purchase or sale agreements, interest rate swap agreement, or
4-21 commitments or other contracts or agreements authorized and
4-22 approved by the governing body of an issuer either in connection
4-23 with the authorization, issuance, security, exchange, payment,
4-24 purchase, or redemption of obligations and/or interest thereon, or
4-25 as otherwise authorized by this Act.
4-26 (8) "Lease-leaseback agreements" means contracts,
4-27 agreements, notes, security agreements, conveyances, bills of sale,
5-1 deeds, leases as lessee or lessor, and currency hedges, swap
5-2 transactions, or agreements relating to foreign and domestic
5-3 currency entered into by issuers to provide tax benefits to another
5-4 party that are available with respect to property under the laws of
5-5 a foreign country or to encourage private investment with an issuer
5-6 in the United States. Lease-leaseback agreements may have the
5-7 terms, maturities, duration, indemnities, and other provisions that
5-8 are approved by the governing body of the issuer. In connection
5-9 with a lease-leaseback agreement, the issuer shall deposit, in
5-10 trust, escrow, or similar arrangement, cash or lawful investment
5-11 securities or shall enter into one or more payment agreements,
5-12 financial guarantees, or insurance contracts, with counterparties
5-13 having either a corporate credit or debt rating in any form, a
5-14 claims-paying ability, or a rating for financial strength of "AA"
5-15 or better by Moody's Investors Service, Inc. or Standard and Poor's
5-16 Ratings Group or of "A" (Class XII) or better by the A.M. Best
5-17 Company's rating system, or the equivalent of such ratings in the
5-18 future, that by their terms, including interest projected to be
5-19 earned on the cash or investment securities or payment obligations,
5-20 are sufficient in amount to pay when due all amounts required to be
5-21 paid by the issuer as rent over the full term of the agreement plus
5-22 any optional purchase price due under the agreement. Property
5-23 sold, acquired, or otherwise transferred under lease-leaseback
5-24 agreements is considered for all purposes to be property owned and
5-25 held by the issuer and used for public purposes and is exempt from
5-26 ad valorem taxes imposed in this state. A leasehold interest in
5-27 the property is exempt from Section 25.07(a), Tax Code. A sale,
6-1 lease, sublease, or other transfer of personal property by or to
6-2 the issuer under a lease-leaseback agreement is exempt from all
6-3 sales, use, and motor vehicle taxes imposed by this state or a
6-4 political subdivision of this state.
6-5 Explanation: This change is necessary to omit text that is
6-6 not needed because of other changes made to the bill.
Elkins
_______________________________
Speaker of the House
I certify that H.R. No. 1303 was adopted by the House on May
29, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House