By:  Madla                                            S.R. No. 1164
                                  SENATE RESOLUTION
 1-1           BE IT RESOLVED by the Senate of the State of Texas, 76th
 1-2     Legislature, Regular Session, 1999, That Senate Rule 12.03 be
 1-3     suspended, as provided by Senate Rule 12.08, to enable the
 1-4     conference committee appointed to resolve the differences between
 1-5     the house and senate versions of S.B. No. 1520, relating to the
 1-6     authority of certain cities, counties, districts, authorities,
 1-7     agencies, and nonprofit corporations to enter into lease-leaseback
 1-8     transactions, to consider and take action on the following matters:
 1-9           (1)  Senate Rules 12.03(3) and (4) are suspended to permit
1-10     the committee to add a new SECTION to the bill to read as follows:
1-11           SECTION 1.  Chapter 272, Local Government Code, is amended by
1-12     adding Section 272.004 to read as follows:
1-13           Sec. 272.004.  TRANSFERS OF PROPERTY BY CERTAIN POLITICAL
1-14     SUBDIVISIONS.  (a)  In this section, "political subdivision" has
1-15     the same meaning as the term "issuer" under Section 1(1), Chapter
1-16     656, Acts of the 68th Legislature, Regular Session, 1983 (Article
1-17     717q, Vernon's Texas Civil Statutes).
1-18           (b)  A political subdivision may sell, lease as a lessee or
1-19     lessor, or otherwise transfer property in the same manner as the
1-20     subregional board of a regional transportation authority under
1-21     Sections 452.108(d) and (e), Transportation Code.
1-22           (c)  A sale, lease, or other transfer of property under this
1-23     section is exempt from the requirements of Section 272.001 and any
1-24     other notice or competitive bidding requirements that may otherwise
 2-1     apply to the political subdivision.
 2-2           (d)  A sale, lease, or other transfer of property under this
 2-3     section must be approved by a majority of the voters voting at an
 2-4     election held within the boundaries of the political subdivision if
 2-5     the agreement:
 2-6                 (1)  involves the levy by the political subdivision of
 2-7     a tax in an amount sufficient to make payments due under the
 2-8     agreement; and
 2-9                 (2)  is executed on or after September 1, 1999.
2-10           Explanation:  This change is necessary to permit certain
2-11     political subdivisions to transfer property in the same manner as a
2-12     regional transportation authority under Sections 452.108(d) and
2-13     (e), Transportation Code.
2-14           (2)  Senate Rules 12.03(3) and (4) are suspended to permit
2-15     the committee to add a new SECTION to the bill to read as follows:
2-16           SECTION 2.  Subsection (d), Section 452.108, Transportation
2-17     Code, is amended to read as follows:
2-18           (d)  To provide tax benefits to another party that are
2-19     available with respect to property under the laws of a foreign
2-20     country or to encourage private investment with a transportation
2-21     authority in the United States, and notwithstanding any other
2-22     provision of this chapter, an authority consisting of one subregion
2-23     governed by a subregional board created under Subchapter O may
2-24     enter into and execute, as it considers appropriate, contracts,
2-25     agreements, notes, security agreements, conveyances, bills of sale,
2-26     deeds, leases as lessee or lessor, and currency hedges, swap
 3-1     transactions, or agreements relating to foreign and domestic
 3-2     currency.  The agreements or instruments may have the terms,
 3-3     maturities, duration, provisions as to governing law, indemnities,
 3-4     and other provisions that are approved by the subregional board.
 3-5     In connection with any transaction authorized by this subsection,
 3-6     the authority may [shall] deposit in trust, escrow, or similar
 3-7     arrangement cash or lawful investments securities, or may [shall]
 3-8     enter into one or more payment agreements, financial guarantees, or
 3-9     insurance contracts with counterparties having either a corporate
3-10     credit or debt rating in any form, a claims-paying ability, or a
3-11     rating for financial strength of "AA" or better by Moody's
3-12     Investors Service, Inc. or by Standard & Poor's Corporation or of
3-13     "A (Class XII)" or better by Best's rating system, that by their
3-14     terms, including interest to be earned on the cash or securities,
3-15     or payment obligations, are sufficient in amount to pay when due
3-16     all amounts required to be paid by the authority as rent over the
3-17     full term of the transaction plus any optional purchase price or
3-18     other obligation due under the transaction.  [A certification in
3-19     advance by an independent financial expert, banker, or certified
3-20     public accountant, who is not an employee of the authority,
3-21     certifying compliance with this requirement constitutes conclusive
3-22     evidence of compliance.]
3-23           Explanation:  This change is necessary to permit certain
3-24     political subdivisions to enter into agreements that guarantee
3-25     payment of obligations due under certain transfers of property.
3-26           (3)  Senate Rules 12.03(3) and (4) are suspended to permit
 4-1     the committee to add a new SECTION to the bill to read as follows:
 4-2           SECTION 3.  The change in law made by this Act applies only
 4-3     to the sale, lease, or other transfer of property on or after the
 4-4     effective date of this Act.  The sale, lease, or other transfer of
 4-5     property before the effective date of this Act is governed by the
 4-6     law in effect immediately before the effective date, and that law
 4-7     is continued in effect for that purpose.
 4-8           Explanation:  This change is necessary to implement the new
 4-9     authority of certain political subdivisions to transfer property in
4-10     the same manner as a regional transportation authority under
4-11     Sections 452.108(d) and (e), Transportation Code.
4-12           (4)  Senate Rule 12.04(2) is suspended to permit the
4-13     committee to omit the following section of the bill:
4-14           SECTION 1.  Section 1, Chapter 656, Acts of the 68th
4-15     Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
4-16     Civil Statutes), is amended by amending Subdivision (6) and adding
4-17     Subdivision (8) to read as follows:
4-18                 (6)  "Credit agreement" means lease-leaseback
4-19     agreements, loan agreement, revolving credit agreement, agreement
4-20     establishing a line of credit, letter of credit, reimbursement
4-21     agreement, insurance contract, commitments to purchase obligations,
4-22     purchase or sale agreements, interest rate swap agreement, or
4-23     commitments or other contracts or agreements authorized and
4-24     approved by the governing body of an issuer either in connection
4-25     with the authorization, issuance, security, exchange, payment,
4-26     purchase, or redemption of obligations and/or interest thereon, or
 5-1     as otherwise authorized by this Act.
 5-2                 (8)  "Lease-leaseback agreements" means contracts,
 5-3     agreements, notes, security agreements, conveyances, bills of sale,
 5-4     deeds, leases as lessee or lessor, and currency hedges, swap
 5-5     transactions, or agreements relating to foreign and domestic
 5-6     currency entered into by issuers to provide tax benefits to another
 5-7     party that are available with respect to property under the laws of
 5-8     a foreign country or to encourage private investment with an issuer
 5-9     in the United States.  Lease-leaseback agreements may have the
5-10     terms, maturities, duration, indemnities, and other provisions that
5-11     are approved by the governing body of the issuer.  In connection
5-12     with a lease-leaseback agreement, the issuer shall deposit, in
5-13     trust, escrow, or similar arrangement, cash or lawful investment
5-14     securities or shall enter into one or more payment agreements,
5-15     financial guarantees, or insurance contracts, with counterparties
5-16     having either a corporate credit or debt rating in any form, a
5-17     claims-paying ability, or a rating for financial strength of "AA"
5-18     or better by Moody's Investors Service, Inc. or Standard and Poor's
5-19     Ratings Group or of "A" (Class XII) or better by the A.M. Best
5-20     Company's rating system, or the equivalent of such ratings in the
5-21     future, that by their terms, including interest projected to be
5-22     earned on the cash or investment securities or payment obligations,
5-23     are sufficient in amount to pay when due all amounts required to be
5-24     paid by the issuer as rent over the full term of the agreement plus
5-25     any optional purchase price due under the agreement.  Property
5-26     sold, acquired, or otherwise transferred under lease-leaseback
 6-1     agreements is considered for all purposes to be property owned and
 6-2     held by the issuer and used for public purposes and is exempt from
 6-3     ad valorem taxes imposed in this state.  A leasehold interest in
 6-4     the property is exempt from Section 25.07(a), Tax Code.  A sale,
 6-5     lease, sublease, or other transfer of personal property by or to
 6-6     the issuer under a lease-leaseback agreement is exempt from all
 6-7     sales, use, and motor vehicle taxes imposed by this state or a
 6-8     political subdivision of this state.
 6-9           Explanation:  This change is necessary to omit text that is
6-10     not needed because of other changes made to the bill.
6-11                                  ______________________________________
6-12                                          President of the Senate
6-13                                       I hereby certify that the above
6-14                                  Resolution was adopted by the Senate
6-15                                  on May 28, 1999, by the following
6-16                                  vote:  Yeas 30, Nays 0.
6-17                                  ______________________________________
6-18                                          Secretary of the Senate