By: West S.B. No. 1475
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the issuance of public securities by the state and
1-2 political subdivisions.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 ARTICLE 1.
1-5 SECTION 1.01. Subchapter A, Chapter 1201, Government Code,
1-6 is amended by adding a new Section 1201.006, to read as follows:
1-7 Sec. 1201.006. VALIDATION OF PRIOR PROCEEDINGS AND ISSUANCE.
1-8 All public securities heretofore authorized and issued by any
1-9 issuer, the public security authorization approved or adopted in
1-10 connection with the authorization and issuance of public security,
1-11 and any contracts or agreements executed and delivered in
1-12 connection with the public security that were approved by the
1-13 public security authorization, are validated, ratified, and
1-14 confirmed in all respects.
1-15 SECTION 1.02. Section 1202.003, Government Code, is amended
1-16 by adding new subsection (d), to read as follows:
1-17 (d) Any finding or determination made by the governing body
1-18 of an issuer in the public security or the record of proceedings
1-19 shall be binding and conclusive, and the attorney general shall be
1-20 entitled to rely upon a certification from the issuer to that
1-21 effect.
1-22 SECTION 1.03. Subchapter A, Chapter 1207, Government Code,
2-1 is amended by adding a new Section 1207.007, and renumbering
2-2 Section 1207.007 as Section 1207.008, to read as follows:
2-3 Sec. 1207.007. DELEGATION OF AUTHORITY. (a) In connection
2-4 with the issuance of refunding bonds, an issuer may authorize:
2-5 (1) the maximum principal amount of refunding bonds
2-6 that may be issued; and
2-7 (2) any officer or employee of the issuer to:
2-8 (A) select any specific maturities or series of
2-9 bonds, notes, or other general or special obligations to be
2-10 refunded; and
2-11 (B) effect the sale of the refunding bonds.
2-12 (b) In exercising the authority delegated by the issuer, any
2-13 officer or employee may establish the terms, conditions and details
2-14 related to the issuance and sale of the refunding bonds, including,
2-15 without limitation:
2-16 (1) the form and designation of the refunding bonds;
2-17 (2) the principal amount of the refunding bonds;
2-18 (3) the dates, price, interest rates, interest payment
2-19 dates, principal payment dates and redemption features of the
2-20 refunding bonds;
2-21 (4) the form of escrow agreement described in Section
2-22 1207.062; and
2-23 (5) such other details relating to the issuance and
2-24 sale of the refunding bonds as specified by the issuer in the
2-25 proceedings authorizing the issuance of the refunding bonds.
2-26 (c) Refunding bonds may not be issued if the aggregate
3-1 amount of payments to be made under the refunding bonds exceeds the
3-2 aggregate principal amount of payments that would have been made
3-3 under the terms of the obligations being refunded, unless the
3-4 governing body of the issuer finds in the proceedings authorizing
3-5 the issuance of the refunding bonds that
3-6 (1) the issuance is in the best interests of the
3-7 issuer; and
3-8 (2) a maximum level of loss is specified therein.
3-9 (d) Any finding or determination made by the governing body
3-10 of an issuer in the proceedings authorizing the issuance of
3-11 refunding bonds shall be binding and conclusive, and any person
3-12 shall be entitled to rely upon a certification from the issuer to
3-13 that effect, including, without limitation, the attorney general in
3-14 the performance of the duties of the attorney general specified in
3-15 Chapter 1202.
3-16 SECTION 1.04. Section 1207.062(b), Government Code, is
3-17 amended to read as follows:
3-18 (b) An escrow agreement under Subsection (a) must provide
3-19 that the deposit may be invested only in:
3-20 (1) direct noncallable obligations of the United
3-21 States, including obligations the principal of and interest on
3-22 which are unconditionally guaranteed by the United States;
3-23 (2) noncallable obligations of an agency or
3-24 instrumentality of the United States, including obligations the
3-25 principal of and interest of which are unconditionally guaranteed
3-26 or insured by the agency or instrumentality of the United States
4-1 and which are rated as to investment quality by a nationally
4-2 recognized investment rating firm not less than AAA or its
4-3 equivalent; and
4-4 (3) noncallable obligations of states, agencies,
4-5 counties, cities, and other political subdivisions of any state
4-6 which have been refunded and which are rated as to investment
4-7 quality by a nationally recognized investment rating firm not less
4-8 than AAA or its equivalent and which mature and bear interest
4-9 payable at times and in amounts sufficient to provide for the
4-10 scheduled payment or redemption of the obligation to be refunded.
4-11 The obligations may be in book-entry form.
4-12 SECTION 1.05. Section 1231.044(b), Government Code, is
4-13 amended to read as follows:
4-14 Sec. 1231.044. STATE AUDITOR REVIEW OF STATE SECURITY
4-15 PROCEEDS; REPORT.
4-16 (b) The state auditor shall prepare a report of the review
4-17 and file a copy of the report with the board and with:
4-18 (1) the governor;
4-19 (2) the lieutenant governor;
4-20 (3) the speaker of the house of representatives;
4-21 (4) the secretary of state; and
4-22 (5) each member of the legislature.
4-23 SECTION 1.06. Section 1331.001, Government Code, is amended
4-24 to read as follows:
4-25 Sec. 1331.001. AUTHORITY OF MUNICIPALITY TO ISSUE BONDS. A
4-26 municipality may issue bonds [with one or more interest coupons] in
5-1 the amount it considers expedient to:
5-2 (1) construct or purchase permanent improvements
5-3 inside the municipal boundaries, including public buildings,
5-4 waterworks, or sewers;
5-5 (2) construct or improve the streets and bridges of
5-6 the municipality; or
5-7 (3) construct or purchase building sites or buildings
5-8 for the public schools and other institutions of learning inside
5-9 the municipality, if the municipality has assumed exclusive control
5-10 of those schools and institutions.
5-11 SECTION 1.07. Section 1331.002, Government Code, is amended
5-12 to read as follows:
5-13 Sec. 1331.002. SIGNATURES [OF MAYOR AND MUNICIPAL
5-14 SECRETARY]. A bond issued by a municipality under Section 1331.001
5-15 [must] shall be signed [by the mayor and countersigned by the
5-16 municipal secretary] in the manner provided in the proceedings
5-17 authorizing the issuance of the bonds.
5-18 SECTION 1.08. Subsections (4) and (5) of Section 1371.001,
5-19 Government Code, are amended to read as follows:
5-20 (4) "Issuer" means:
5-21 (A) a home-rule municipality that:
5-22 (i) adopted its charter under Section 5,
5-23 Article XI, Texas Constitution;
5-24 (ii) has a population of [90,000] 50,000
5-25 or more; and
5-26 (iii) has outstanding long-term
6-1 indebtedness [secured by the revenue of the public works for which
6-2 an obligation is being issued] that is rated by a nationally
6-3 recognized rating agency for municipal securities in one of the
6-4 four highest rating categories for a long-term obligation;
6-5 (5) "Obligation" means a [note, warrant, or other
6-6 special obligation authorized to be issued by an issuer under this
6-7 chapter or a] public security as defined by Section 1201.002 or
6-8 other special obligation authorized to be issued by an issuer that,
6-9 before delivery, is rated by a nationally recognized rating agency
6-10 for municipal securities in one of the three highest rating
6-11 categories for a short-term debt instrument or one of the four
6-12 highest rating categories for a long-term debt instrument.
6-13 SECTION 1.09. Section 1371.003, Government Code, is amended
6-14 by adding new subsection (d), to read as follows:
6-15 (d) Any finding or determination made by the governing body
6-16 of an issuer under authority of this chapter shall be binding and
6-17 conclusive, and any person shall be entitled to rely upon a
6-18 certification from the issuer to that effect, including, without
6-19 limitation, the attorney general in the performance of the duties
6-20 of the attorney general specified in Chapter 1202.
6-21 SECTION 1.10. Section 1371.053, Government Code, is amended
6-22 to read as follows:
6-23 (a) An obligation authorization must be approved by a
6-24 governing body before an obligation may be issued. [The issuance
6-25 of an obligation must be authorized by an obligation
6-26 authorization.]
7-1 SECTION 1.11. Subsection (b) of Section 1371.056, Government
7-2 Code, is amended to read as follows:
7-3 (b) In connection with the issuance of an obligation, or in
7-4 conjunction with the payment, sale, resale, or exchange of the
7-5 obligation, a governing body may enter into a credit agreement:
7-6 (1) to enhance the security of an obligation;
7-7 (2) to provide for the payment, redemption, or
7-8 remarketing of an obligation and interest on the obligation in
7-9 order to reduce the interest payable on the obligation; or
7-10 (3) in conjunction with the interim financing of an
7-11 eligible project. [To enhance the security for or provide for the
7-12 payment, redemption, or remarketing of an obligation and interest
7-13 on the obligation in order to reduce the interest payable on the
7-14 obligation or in conjunction with the interim financing of an
7-15 eligible project of an issuer, a governing body may enter into a
7-16 credit agreement:]
7-17 [(1) at or after the issuance of the obligation; or]
7-18 [(2) in conjunction with the payment, sale, resale, or
7-19 exchange of the obligation.]
7-20 SECTION 1.12. Section 1371.056, Government Code, is amended
7-21 by adding a new subsection (g), to read as follows:
7-22 (g) The governing body of an issuer may delegate to any
7-23 officer or employee the authority to enter into transactions under
7-24 a credit agreement authorized by the governing body and to execute
7-25 any instruments in connection with the transactions.
7-26 SECTION 1.13. Section 1371.057, Government Code, is amended
8-1 by adding a new subsection (d), to read as follows:
8-2 (d) The comptroller shall register the record of the
8-3 proceedings relating to the issuance of obligations or the
8-4 execution of a credit agreement.
8-5 SECTION 1.14. Subsection (b) of Section 1371.103, Government
8-6 Code, is amended to read as follows:
8-7 (b) A governing body may secure an obligation and pay the
8-8 cost of a credit agreement executed and delivered in connection
8-9 with the financing of a project cost for an eligible project
8-10 described in Section 1371.001(2)(D) with ad valorem taxes or with
8-11 other sources permitted by this chapter.
8-12 SECTION 1.15. Section 1504.001, Government Code, and
8-13 subsections (3) and (4) thereof, are amended to read as follows:
8-14 Sec. 1504.001. AUTHORITY FOR CULTURAL OR ATHLETIC
8-15 FACILITIES. A municipality may establish, acquire, lease as lessee
8-16 or lessor, construct, improve, enlarge, equip, repair, operate, or
8-17 maintain a cultural or athletic facility, including:
8-18 (3) a hotel owned by a municipality or a nonprofit
8-19 municipally owned local government corporation created under
8-20 Chapter 431, Transportation Code, that is located not more than
8-21 1,000 feet from a convention center owned by a municipality with a
8-22 population of 250,000 [1,500,000] or more;
8-23 (4) a historic hotel owned by a municipality or a
8-24 nonprofit municipally owned local government corporation created
8-25 under Chapter 431, Transportation Code, that is located not more
8-26 than one mile from a convention center owned by a municipality with
9-1 a population of 250,000 [1,500,000] or more; or
9-2 SECTION 1.16. Section 1504.003, Government Code, is amended
9-3 by adding a new subsection (d), to read as follows:
9-4 (d) A municipality may pledge to the payment of bonds issued
9-5 under this subchapter, alone or in combination with the revenue
9-6 from the facility for which bonds are issued, hotel occupancy taxes
9-7 that are pledged under and in accordance with the provisions of
9-8 Section 351.102, Tax Code.
9-9 SECTION 1.17. Section 1504.008, Government Code, is amended
9-10 to read as follows:
9-11 Sec. 1504.008. SIGNATURES. A bond issued under this
9-12 subchapter may [must] be signed in the manner provided in the
9-13 ordinance [by the mayor of the municipality and countersigned by
9-14 the secretary or clerk of the municipality].
9-15 SECTION 1.18. Section 1504.010, Government Code, and
9-16 subsection (1) thereof, are amended to read as follows:
9-17 Sec. 1504.010. TERM OF CERTAIN LEASES. In a municipality
9-18 with a population of 250,000 [1.5 million] or more, a lease entered
9-19 into under Section 1504.001 may have a term of not to exceed 60
9-20 years if:
9-21 (1) the lessee proposes to invest more than $10 [$20]
9-22 million to renovate . . . ;
9-23 SECTION 1.19. Subsection (b) of Section 1504.105, Government
9-24 Code, is amended to read as follows:
9-25 (b) Each contract, bond, note, or other evidence of
9-26 indebtedness issued or included under this subchapter must contain
10-1 substantially the following provision: 'The holder of this
10-2 obligation is not entitled to demand payment of this obligation out
10-3 of any money raised by taxation.'
10-4 SECTION 1.20. Subsection (b) of Section 1504.154, Government
10-5 Code, is amended to read as follows:
10-6 (b) The face of each bond issued under this subchapter must
10-7 contain substantially the following provision: 'The holder of this
10-8 obligation is not entitled to demand payment of this obligation out
10-9 of any money raised by taxation.'
10-10 SECTION 1.21. Section 1504.157, Government Code, is amended
10-11 to read as follows:
10-12 Sec. 1504.157. SIGNATURES. A bond issued under this
10-13 subchapter may [must] be signed in the manner provided in the
10-14 ordinance [by the mayor of the municipality and countersigned by
10-15 the secretary of the municipality].
10-16 SECTION 1.22. Subsection (b) of Section 1504.205, Government
10-17 Code, is amended to read as follows:
10-18 (b) Each contract, bond, or note issued or executed under
10-19 this subchapter must contain substantially the following provision:
10-20 'The holder of this obligation is not entitled to demand payment of
10-21 this obligation out of any money raised by taxation.'
10-22 SECTION 1.23. Section 1504.251, Government Code, is amended
10-23 to read as follows:
10-24 Sec. 1504.251. APPLICABILITY OF SUBCHAPTER. This subchapter
10-25 applies only to a home-rule municipality with a population of
10-26 250,000 [1.2 million] or more.
11-1 SECTION 1.24. Section 1504.253, Government Code, is amended
11-2 to read as follows:
11-3 Sec. 1504.253. AUTHORITY TO ISSUE REVENUE BONDS. The
11-4 governing body of a municipality by ordinance may issue revenue
11-5 bonds to provide all or part of the money to effect any purpose
11-6 [establish, acquire, construct, improve, equip, repair, operate, or
11-7 maintain a cultural or parking facility] described by Section
11-8 1504.252.
11-9 SECTION 1.25. Section 1504.261, Government Code, is amended
11-10 to read as follows:
11-11 Sec. 1504.261. SIGNATURES. A bond issued under this
11-12 subchapter may [must] be signed in the manner provided in the
11-13 ordinance [by the mayor of the municipality and countersigned by
11-14 the secretary or clerk of the municipality].
11-15 SECTION 1.26. Section 152.001(a), Water Code, is amended to
11-16 read as follows:
11-17 (a) This chapter applies [only] to a river authority that is
11-18 engaged in the distribution and sale of electric energy to the
11-19 public or to a river authority which has created a corporation
11-20 under Section 152.051 that is engaged in the distribution and sale
11-21 of electric energy to the public.
11-22 SECTION 1.27. Section 152.052, Water Code, is amended by
11-23 adding a new subsection (d) to read as follows:
11-24 (d) A corporation and the creating river authority may share
11-25 officers, directors, employees, equipment and facilities, and may
11-26 provide goods or services to each other at cost without the
12-1 requirement of competitive bidding.
12-2 SECTION 1.28. Subchapter B, Chapter 152, Water Code, is
12-3 amended by adding a new Section 152.056 to read as follows:
12-4 SECTION 152.056. APPLICATION OF AUTHORITY OF RIVER AUTHORITY
12-5 TO OTHER LAW. Reference in any other law to a river authority that
12-6 is engaged in the distribution and sale of electric energy to the
12-7 public shall include any river authority which has created a
12-8 corporation under Section 152.051 that is engaged in the
12-9 distribution and sale of electric energy to the public.
12-10 SECTION 1.29. Chapter 152, Water Code, is amended by adding
12-11 a new Subchapter G to read follows:
12-12 SUBCHAPTER G. ELECTRIC TRANSMISSION SERVICES AND
12-13 FACILITIES OF RIVER AUTHORITY
12-14 Sec. 152.301. ELECTRIC TRANSMISSION SERVICES AND FACILITIES.
12-15 A river authority may:
12-16 (1) provide transmission services, as defined by
12-17 Section 31.002, Utilities Code, on a regional basis to any eligible
12-18 transmission customer at any location within or outside the
12-19 boundaries of the river authority; and
12-20 (2) acquire, finance, lease, construct, rebuild,
12-21 operate, or sell electric transmission facilities at any location
12-22 within or outside the boundaries of the river authority.
12-23 Sec. 152.302 LIMITATION ON ELECTRIC TRANSMISSION FACILITIES.
12-24 This subchapter does not authorize a river authority to construct
12-25 electric transmission facilities for an ultimate consumer of
12-26 electricity to enable that consumer to bypass the transmission or
13-1 distribution facilities of its existing provider.
13-2 SECTION 1.30. The following provisions of the Government
13-3 Code are repealed:
13-4 (a) Chapter 1253;
13-5 (b) Subchapter C, Chapter 1331;
13-6 (c) Subchapter B, Chapter 1504;
13-7 (d) Subchapter D, Chapter 1504;
13-8 (e) Subchapter B, Chapter 1509; and
13-9 (f) Subchapter F, Chapter 1509.
13-10 SECTION 1.31. This Article amends a proposed nonsubstantive
13-11 revision of the laws relating to public securities. This Article
13-12 takes effect September 1, 1999, but only if H.B. No. _____ or S.B.
13-13 No. _____, 76th Legislature, Regular Session, 1999, is enacted and
13-14 becomes law. If H.B. No. _____ or S.B. No. _____, 76th
13-15 Legislature, Regular Session, 1999, is not enacted or does not
13-16 become law, this Article has no effect.
13-17 ARTICLE 2.
13-18 Section 2.01. The following articles are amended to conform
13-19 to the changes made to the proposed nonsubstantive revision of the
13-20 laws relating to public securities by Article 1 of this Act:
13-21 (1) Chapter 503, Acts of the 54th Legislature, Regular
13-22 Session, 1955; (Article 717k, Vernon's Texas Civil Statutes);
13-23 (2) Chapter 784, Acts of the 61st Legislature, Regular
13-24 Session, 1969 (Article 717k-3, Vernon's Texas Civil Statutes);
13-25 (3) the Bond Procedures Act of 1981 (Article 717k-6,
13-26 Vernon's Texas Civil Statutes);
14-1 (4) Chapter 245, Acts of the 67th Legislature, Regular
14-2 Session, 1981 (Article 717p, Vernon's Texas Civil Statutes);
14-3 (5) Chapter 656, Acts of the 68th Legislature, Regular
14-4 Session, 1983 (Article 717q, Vernon's Texas Civil Statutes);
14-5 (6) Articles 823 and 825, Revised Statutes;
14-6 (7) Chapter 425, Acts of the 44th Legislature, 1st
14-7 Called Session, 1935 (Article 1182e, Vernon's Texas Civil
14-8 Statutes);
14-9 (8) Chapter 687, Acts of the 67th Legislature, Regular
14-10 Session, 1981 (Article 1182j, Vernon's Texas Civil Statutes);
14-11 (9) Chapter 350, Acts of the 52nd Legislature, Regular
14-12 Session, 1951; and
14-13 (10) Chapter 63, Acts of the 59th Legislature, Regular
14-14 Session, 1965.
14-15 SECTION 2.02. The following articles are repealed to conform
14-16 to the changes made to the proposed nonsubstantive revision of the
14-17 laws relating to public securities by Article 1 of this Act:
14-18 (1) Articles 827, 828, 829, 830, 831, 832, 833, and
14-19 834, Revised Statutes;
14-20 (2) Chapter 510, Acts of the 51st Legislature, Regular
14-21 Session, 1949 (Article 835j, Vernon's Texas Civil Statutes);
14-22 (3) Chapter 397, Acts of the 51st Legislature, Regular
14-23 Session, 1949 (Article 1015h, Vernon's Texas Civil Statutes);
14-24 (4) Chapter 21, Acts of the 43rd Legislature, Fourth
14-25 Called Session, 1934 (Article 1187d, Vernon's Texas Civil
14-26 Statutes);
15-1 (5) Chapter 314, Acts of the 63rd Legislature, Regular
15-2 Session, 1973 (Article 1269j-4.9, Vernon's Texas Civil Statutes);
15-3 and
15-4 (6) the Bond and Warrant Law of 1931 (Article 2368a,
15-5 Vernon's Texas Civil Statutes).
15-6 SECTION 2.03. This Article takes effect September 1, 1999,
15-7 but only if H.B. No. _____ or S.B. No. _____, 76th Legislature,
15-8 Regular Session, 1999, is not enacted or does not become law. If
15-9 H.B. No. _____ or S.B. No. _____, 76th Legislature, Regular
15-10 Session, 1999, is enacted and becomes law, this Article has no
15-11 effect.
15-12 ARTICLE 3.
15-13 SECTION 3.03. The importance of this legislation and the
15-14 crowded condition of the calendars in both houses create an
15-15 emergency and an imperative public necessity that the
15-16 constitutional rule requiring bills to be read on three several
15-17 days in each house be suspended, and this rule is hereby suspended.