1-1 By: Farrar (Senate Sponsor - Lindsay) H.B. No. 3285
1-2 (In the Senate - Received from the House April 30, 2001;
1-3 May 1, 2001, read first time and referred to Committee on
1-4 Intergovernmental Relations; May 10, 2001, reported favorably by
1-5 the following vote: Yeas 6, Nays 0; May 10, 2001, sent to
1-6 printer.)
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to the issuance and refunding of anticipation notes and
1-10 the financing of certain contracts by certain political
1-11 subdivisions.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 1431.001, Government Code, is amended to
1-14 conform to Sections 3 and 4, Chapter 984, Acts of the 76th
1-15 Legislature, Regular Session, 1999, and is further amended to read
1-16 as follows:
1-17 Sec. 1431.001. DEFINITIONS. In this chapter:
1-18 (1) "Anticipation note" means a note issued under this
1-19 chapter.
1-20 (2) "Eligible countywide district" means a flood
1-21 control district or a hospital district the boundaries of which are
1-22 substantially coterminous with the boundaries of a county with a
1-23 population of three million or more.
1-24 (3) "Eligible school district" means an independent
1-25 school district that has an average daily attendance of 190,000 or
1-26 more as determined under Section 42.005, Education Code.
1-27 (4) "Governing body" means the commissioners court of
1-28 a county or the governing body of a municipality, eligible school
1-29 district, or eligible countywide district authorized to issue
1-30 anticipation notes on behalf of an issuer.
1-31 (5) [(3)] "Issuer" means a county, [or] municipality,
1-32 eligible school district, or eligible countywide district issuing
1-33 an anticipation note.
1-34 SECTION 2. Section 1431.002, Government Code, is amended to
1-35 conform to Sections 4 and 6, Chapter 984, Acts of the 76th
1-36 Legislature, Regular Session, 1999, by adding Subsection (c) and is
1-37 further amended by amending Subsection (a) to read as follows:
1-38 (a) The commissioners court of a county by order, on the
1-39 recommendation of the county auditor or the county budget officer,
1-40 as applicable, or the governing body of an eligible countywide
1-41 district may authorize the issuance of an anticipation note.
1-42 (c) The governing body of an eligible school district by
1-43 order may authorize the issuance of an anticipation note.
1-44 SECTION 3. Section 1431.003(a), Government Code, is amended
1-45 to conform to Section 5, Chapter 984, Acts of the 76th Legislature,
1-46 Regular Session, 1999, and is further amended to read as follows:
1-47 (a) This section applies only to an issuer that is:
1-48 (1) a county; [or]
1-49 (2) a municipality with a population of 80,000 or
1-50 more;
1-51 (3) an eligible school district; or
1-52 (4) an eligible countywide district.
1-53 SECTION 4. Section 1431.004, Government Code, is amended to
1-54 conform to Section 4, Chapter 984, Acts of the 76th Legislature,
1-55 Regular Session, 1999, and is further amended to read as follows:
1-56 Sec. 1431.004. USES OF ANTICIPATION NOTE PROCEEDS. (a) An
1-57 issuer, other than an eligible school district, may use the
1-58 proceeds of an anticipation note to pay:
1-59 (1) a contractual obligation incurred or to be
1-60 incurred for:
1-61 (A) the construction of a public work;
1-62 (B) the purchase of materials, supplies,
1-63 equipment, machinery, buildings, lands, and rights-of-way for the
1-64 issuer's authorized needs and purposes; or
2-1 (C) a professional service, including a service
2-2 by a tax appraisal engineer, engineer, architect, attorney,
2-3 mapmaker, auditor, financial advisor, or fiscal agent;
2-4 (2) operating or current expenses; or
2-5 (3) the issuer's cumulative cash flow deficit.
2-6 (b) The governing body of an eligible school district may
2-7 use the proceeds of an anticipation note to pay an obligation
2-8 incurred or to be incurred for:
2-9 (1) a purpose described by Subsection(a)(1)(C), (2),
2-10 or (3); or
2-11 (2) the purchase of materials, supplies, equipment, or
2-12 machinery for an issuer's authorized needs and purposes.
2-13 (c) For the purposes of this section, the cumulative cash
2-14 flow deficit is the amount by which the sum of an issuer's
2-15 anticipated expenditures and cash reserve reasonably required to
2-16 pay unanticipated expenditures exceeds the amount of the issuer's
2-17 cash, marketable securities, and money in an account that may be
2-18 used to pay an issuer's anticipated expenditures, other than:
2-19 (1) money in an account the use of which is subject to
2-20 legislative or judicial action or that is subject to a legislative,
2-21 judicial, or contractual requirement that the account be
2-22 reimbursed; or
2-23 (2) the proceeds of an anticipation note.
2-24 (d) [(c)] For the purposes of Subsection (c) [(b)], an
2-25 amount equal to one month's anticipated expenditures is presumed to
2-26 be reasonably required as a cash reserve.
2-27 SECTION 5. Section 1431.006, Government Code, is amended to
2-28 conform to Section 7, Chapter 984, Acts of the 76th Legislature,
2-29 Regular Session, 1999, and is further amended to read as follows:
2-30 Sec. 1431.006. LIMITATION ON NOTES TO PAY EXPENSES.
2-31 Anticipation notes issued for the purposes described by [under]
2-32 Section 1431.004(a)(2) may not, in the fiscal year in which the
2-33 attorney general approves the notes:
2-34 (1) for a municipality, exceed 75 percent of the
2-35 revenue or taxes anticipated to be collected in that year; [or]
2-36 (2) for a county or an eligible countywide district,
2-37 exceed 50 percent of the revenue or taxes anticipated to be
2-38 collected in that year; or
2-39 (3) for an eligible school district, exceed 75 percent
2-40 of the income of the district for the fiscal year preceding that
2-41 year.
2-42 SECTION 6. Section 1431.007, Government Code, is amended to
2-43 read as follows:
2-44 Sec. 1431.007. GENERAL SOURCES OF PAYMENT. (a) Except as
2-45 provided by Subsection (b), a [A] governing body may:
2-46 (1) provide that anticipation notes be paid from and
2-47 secured by revenue, taxes, or the proceeds of bonds to be issued by
2-48 the issuer; and
2-49 (2) pledge to the payment of anticipation notes
2-50 revenue, taxes, or the proceeds of bonds to be issued by the
2-51 issuer.
2-52 (b) The governing body of a flood control district operating
2-53 as a conservation and reclamation district that issues anticipation
2-54 notes for one or more purposes described in Section 1431.004(a)(1)
2-55 may:
2-56 (1) provide that the anticipation notes be paid from
2-57 and secured by revenue or the proceeds of bonds to be issued by the
2-58 issuer; and
2-59 (2) pledge to the payment of the anticipation notes
2-60 revenues or the proceeds of bonds to be issued by the issuer.
2-61 SECTION 7. Section 1431.009, Government Code, is amended to
2-62 conform to Section 7, Chapter 984, Acts of the 76th Legislature,
2-63 Regular Session, 1999, and is further amended to read as follows:
2-64 Sec. 1431.009. MATURITY. (a) Except as provided by
2-65 Subsection (b), an [An] anticipation note issued for a purpose
2-66 described by Section 1431.004(a)(1) or (b)(2) must mature before
2-67 the seventh anniversary of the date that the attorney general
2-68 approves the note.
2-69 (b) An anticipation note issued by a county with a
3-1 population of three million or more, an eligible countywide
3-2 district, or an eligible school district for a purpose described by
3-3 Section 1431.004(a)(1) or (b)(2) must mature before the 15th
3-4 anniversary of the date that the attorney general approves the
3-5 note.
3-6 (c) An anticipation note issued for a purpose described by
3-7 Section 1431.004(a)(2) or (3) must mature before the first
3-8 anniversary of the date that the attorney general approves the
3-9 note.
3-10 (d) A bond issued under Chapter 1207 to refund an
3-11 anticipation note issued by a county, municipality, or eligible
3-12 countywide district for a purpose described by Section
3-13 1431.004(a)(1) or by an eligible school district for a purpose
3-14 described by Section 1431.004(a)(1)(C) or (b)(2) is subject to the
3-15 limitation on maturity provided by Section 1207.006 and not the
3-16 limitation provided by Subsection (a).
3-17 SECTION 8. Section 411.003(a), Local Government Code, is
3-18 amended to read as follows:
3-19 (a) The commissioners court of a county may contract with
3-20 the federal soil conservation service, a state soil conservation
3-21 district, the state extension service, a conservation and
3-22 reclamation district, a drainage district, a water control and
3-23 improvement district, a navigation district, a flood control
3-24 district, a levee improvement district, or a municipality as
3-25 provided by Section 256.006, Transportation Code, for the purpose
3-26 of carrying out plans and programs for flood control and soil
3-27 conservation. The contract may provide that payments due under the
3-28 contract are payable from and secured by a pledge of any revenue of
3-29 the county or the county's ad valorem taxes or a combination of
3-30 those revenues and taxes.
3-31 SECTION 9. Section 1431.009(d), Government Code, as added by
3-32 this Act, applies to bonds issued to refund anticipation notes,
3-33 regardless of whether the anticipation notes were issued before,
3-34 on, or after the effective date of this Act.
3-35 SECTION 10. (a) In accordance with Section 311.031(c),
3-36 Government Code, giving effect to a substantive amendment enacted
3-37 by the same legislature that codifies the amended statute, the text
3-38 of Sections 1431.001 through 1431.004, 1431.006, and 1431.009,
3-39 Government Code, as set out in this Act, gives effect to changes
3-40 made by Sections 3 through 7, Chapter 984, Acts of the 76th
3-41 Legislature, Regular Session, 1999.
3-42 (b) To the extent of any conflict, this Act prevails over
3-43 another Act of the 77th Legislature, Regular Session, 2001,
3-44 relating to nonsubstantive additions and corrections in enacted
3-45 codes.
3-46 SECTION 11. Sections 3 through 7, Chapter 984, Acts of the
3-47 76th Legislature, Regular Session, 1999, are repealed.
3-48 SECTION 12. This Act takes effect September 1, 2001.
3-49 * * * * *