1-1                                   AN ACT
 1-2     relating to the issuance and sale of and security and payment for
 1-3     public securities.
 1-5           SECTION 1.  Subsection (a), Section 1201.022, Government
 1-6     Code, is amended to read as follows:
 1-7           (a)  A public security may be:
 1-8                 (1)  issued singly or in a series;
 1-9                 (2)  made payable in a specified amount or amounts or
1-10     installments to:
1-11                       (A)  the bearer;
1-12                       (B)  a registered or named person;
1-13                       (C)  the order of a registered or named person;
1-14     or
1-15                       (D)  a successor or assign of a registered or
1-16     named person; [and]
1-17                 (3)  issued to be sold:
1-18                       (A)  at a public or private sale; and
1-19                       (B)  under the terms determined by the governing
1-20     body of the issuer to be in the issuer's best interests; and
1-21                 (4)  issued with other specified characteristics, on
1-22     additional specified terms, or in a specified manner.
1-23           SECTION 2.  Subchapter B, Chapter 1201, Government Code, is
1-24     amended by adding Section 1201.028 to read as follows:
 2-1     Notwithstanding any other law, including a provision in a municipal
 2-2     charter, the following actions taken at a meeting of the governing
 2-3     body of an issuer are effective immediately and a subsequent
 2-4     meeting is not required:
 2-5                 (1)  a resolution, order, or ordinance calling an
 2-6     election to:
 2-7                       (A)  authorize the issuance and sale of a public
 2-8     security; or
 2-9                       (B)  approve the resources, revenue, or income of
2-10     the issuer that may be pledged as security for a public security;
2-11                 (2)  a resolution, order, or ordinance canvassing the
2-12     results of an election described by Subdivision (1); or
2-13                 (3)  a public security authorization.
2-14           SECTION 3.  Section 1203.023, Government Code, is amended to
2-15     read as follows:
2-17     COMPANY OR COMMERCIAL BANK.  At the direction of the issuer, a [A]
2-18     trust company or a commercial bank acting as a registrar under this
2-19     chapter shall maintain the registrar records in this state.
2-20           SECTION 4.  Section 1207.008, Government Code, is amended to
2-21     read as follows:
2-22           Sec. 1207.008.  LIMITATION.  (a)  An issuer may not issue
2-23     refunding bonds if the aggregate amount of payments to be made
2-24     under the refunding bonds exceeds the aggregate amount of payments
2-25     that would have been made under the terms of the obligations being
2-26     refunded unless:
 3-1                 (1)  the governing body of the issuer, in the
 3-2     proceedings authorizing the issuance of the refunding bonds, finds
 3-3     that the issuance is in the best interests of the issuer; and
 3-4                 (2)  the maximum amount by which the aggregate amount
 3-5     of payments to be made under the refunding bonds exceeds the
 3-6     aggregate amount of payments that would have been made under the
 3-7     terms of the obligations being refunded is specified in the
 3-8     proceedings.
 3-9           (b)  An issuer is not required to comply with Subsection
3-10     (a)(2) if the governing body of the issuer determines and states in
3-11     the proceedings authorizing the issuance of the refunding bonds
3-12     that the manner in which the refunding is being executed does not
3-13     make it practicable to make the determination required by that
3-14     subsection.
3-15           SECTION 5.  Subsection (a), Section 1207.061, Government
3-16     Code, is amended to read as follows:
3-17           (a)  An issuer may, in lieu of making a deposit with the
3-18     comptroller under Subchapter B, deposit an amount of money
3-19     sufficient to provide for the payment or redemption of the
3-20     obligations, including assumed obligations, to be refunded or to be
3-21     paid or redeemed in whole or in part without issuing refunding
3-22     bonds, directly with:
3-23                 (1)  a paying agent for any of the obligations to be
3-24     refunded, paid, or redeemed; [or]
3-25                 (2)  the trustee under a trust indenture, deed of
3-26     trust, or similar instrument providing security for the obligations
 4-1     to be refunded, paid, or redeemed; or
 4-2                 (3)  a trust company or commercial bank other than one
 4-3     described by Subdivision (1) or (2) that:
 4-4                       (A)  does not act as a depository for the issuer;
 4-5     and
 4-6                       (B)  is named in the proceedings of the issuer
 4-7     authorizing execution of an agreement under Section 1207.062.
 4-8           SECTION 6.  Subsection (a), Section 1207.062, Government
 4-9     Code, is amended to read as follows:
4-10           (a)  An issuer may enter into an escrow or similar agreement
4-11     with a person described by Section 1207.061(a) [paying agent or
4-12     trustee] with respect to the safekeeping, investment,
4-13     administration, and disposition of a deposit made under Section
4-14     1207.061.
4-15           SECTION 7.  Section 1207.063, Government Code, is amended to
4-16     read as follows:
4-17           Sec. 1207.063.  DUTY TO COMPLY.  A person described by
4-18     Section 1201.061(a) [paying agent or trustee] that enters into an
4-19     agreement under Section 1207.062 shall comply with each term of
4-20     that agreement and, from the deposited money and in the manner and
4-21     to the extent provided by the agreement, make available to any
4-22     other paying agent or trustee for an obligation of the same or a
4-23     different series of obligations to be refunded, paid, or redeemed,
4-24     the amounts required by the terms of the obligation to pay or
4-25     redeem the principal of and interest on the obligation when due.
4-26           SECTION 8.  Subdivision (2), Section 1371.001, Government
 5-1     Code, is amended to conform to Section 1, Chapter 1018, Acts of the
 5-2     76th Legislature, Regular Session, 1999, to read as follows:
 5-3                 (2)  "Eligible project" means:
 5-4                       (A)  the acquisition or construction of or an
 5-5     improvement, addition, or extension to a public works, including a
 5-6     capital asset or facility incident and related to the operation,
 5-7     maintenance, or administration of the public works, and:
 5-8                             (i)  with respect to a property or a
 5-9     facility for the generation of electric power and energy, fuel
5-10     acquisition or the development or transportation of power, energy,
5-11     or fuel;
5-12                             (ii)  with respect to a property or a
5-13     facility for a public transportation system:
5-14                                   (a)  a building, terminal, garage,
5-15     shop, or other structure, rolling stock, equipment, or another
5-16     facility for mass public transportation; or
5-17                                   (b)  a vehicle parking area or a
5-18     facility necessary or convenient for the beneficial use and access
5-19     of persons and vehicles to a station, terminal, yard, car, or bus,
5-20     or for the protection or environmental enhancement of a facility
5-21     for mass public transportation; and
5-22                             (iii)  with respect to a property or a
5-23     facility for a port facility, a wharf or dock, a warehouse, grain
5-24     elevator, or other storage facility, a bunkering facility,
5-25     port-related railroad or bridge, floating plant or facility,
5-26     lightering facility, cargo handling facility, towing facility, or
 6-1     any other facility or aid incident to or useful in the operation of
 6-2     a port facility;
 6-3                       (B)  a causeway, bridge, tunnel, turnpike,
 6-4     highway, or combination of those facilities, including:
 6-5                             (i)  a necessary overpass, underpass,
 6-6     interchange, entrance plaza, tollhouse, service station, approach,
 6-7     fixture, accessory, or item of equipment, or a storage,
 6-8     administration, or other necessary building; and
 6-9                             (ii)  a property right or other interest
6-10     acquired in connection with those facilities;
6-11                       (C)  a public improvement owned by a county that
6-12     serves the purpose of attracting visitors and tourists to the
6-13     county, including a civic center, auditorium, exhibition hall,
6-14     coliseum, stadium, or parking area;
6-15                       (D)  a project for which there exists authorized
6-16     but unissued obligations approved by a majority of the voters of
6-17     the issuer, including obligations payable from ad valorem taxes;
6-18     [or]
6-19                       (E)  a project for which an issuer is authorized
6-20     to issue revenue bonds secured, in whole or in part, by revenue
6-21     derived from or related to student loans; or
6-22                       (F)  an approved venue project under Chapter 334
6-23     or 335, Local Government Code.
6-24           SECTION 9.  Subdivision (4), Section 1371.001, Government
6-25     Code, is amended to conform to Section 1, Chapter 378, Acts of the
6-26     76th Legislature, Regular Session, 1999, Section 1, Chapter 984,
 7-1     Acts of the 76th Legislature, Regular Session, 1999, and Section 1,
 7-2     Chapter 1018, Acts of the 76th Legislature, Regular Session, 1999,
 7-3     and further amended to read as follows:
 7-4                 (4)  "Issuer" means:
 7-5                       (A)  a home-rule municipality that:
 7-6                             (i)  adopted its charter under Section 5,
 7-7     Article XI, Texas Constitution;
 7-8                             (ii)  has a population of 50,000 or more;
 7-9     and
7-10                             (iii)  has outstanding long-term
7-11     indebtedness that is rated by a nationally recognized rating agency
7-12     for municipal securities in one of the four highest rating
7-13     categories for a long-term obligation;
7-14                       (B)  a conservation and reclamation district
7-15     created and organized as a river authority under Section 52,
7-16     Article III, or Section 59, Article XVI, Texas Constitution;
7-17                       (C)  a joint powers agency organized and
7-18     operating under Chapter 163, Utilities Code;
7-19                       (D)  a metropolitan rapid transit authority or
7-20     regional transportation authority created, organized, and operating
7-21     under Chapter 451 or 452, Transportation Code;
7-22                       (E)  a conservation and reclamation district
7-23     organized or operating as a navigation district under Section 52,
7-24     Article III, or Section 59, Article XVI, Texas Constitution;
7-25                       (F)  a district organized or operating under
7-26     Section 59, Article XVI, Texas Constitution, that has all or part
 8-1     of two or more municipalities within its boundaries;
 8-2                       (G)  a state agency, including a state
 8-3     institution of higher education;
 8-4                       (H)  a hospital authority created or operating
 8-5     under Chapter 262 or 264, Health and Safety Code, in a county that:
 8-6                             (i)  has a population of more than two
 8-7     million; or
 8-8                             (ii)  is included, in whole or in part, in
 8-9     a standard metropolitan statistical area of this state that
8-10     includes a county with a population of more than 1.8 million;
8-11                       (I)  a hospital district in a county that has a
8-12     population of more than two million;
8-13                       (J)  a nonprofit corporation organized to
8-14     exercise the powers of a higher education authority under Section
8-15     53.47(e), Education Code; [or]
8-16                       (K) [(J)]  a county with a population of two
8-17     million or more;
8-18                       (L)  an independent school district that has an
8-19     average daily attendance of 50,000 or more as determined under
8-20     Section 42.005, Education Code;
8-21                       (M)  a municipality or county operating under
8-22     Chapter 334, Local Government Code; or
8-23                       (N)  a district created under Chapter 335, Local
8-24     Government Code.
8-25           SECTION 10.  Section 1371.051, Government Code, is amended to
8-26     read as follows:
 9-1           Sec. 1371.051.  AUTHORITY TO ISSUE OBLIGATION.  As authorized
 9-2     and approved by the [The] governing body of an issuer, the
 9-3     governing body may issue, sell, and deliver an obligation to:
 9-4                 (1)  finance a project cost;
 9-5                 (2)  [or to] refund an obligation issued in connection
 9-6     with an eligible project; or
 9-7                 (3)  finance all or part of a payment owed or to be
 9-8     owed on:
 9-9                       (A)  the establishment of an interest rate lock,
9-10     interest rate hedging agreement, or other credit agreement; or
9-11                       (B)  the settlement or termination, at maturity
9-12     or otherwise, of an interest rate lock, interest rate hedging
9-13     agreement, or other credit agreement, whether the settlement or
9-14     termination occurs:
9-15                             (i)  at the option of the issuer or the
9-16     other party to the credit agreement; or
9-17                             (ii)  by operation of the terms of the
9-18     credit agreement [as may be authorized and approved by the
9-19     governing body].
9-20           SECTION 11.  Subchapter B, Chapter 1371, Government Code, is
9-21     amended by adding Section 1371.0521 to read as follows:
9-22           Sec. 1371.0521.  INDEPENDENT SCHOOL DISTRICT OBLIGATION.  An
9-23     independent school district may not issue an obligation under this
9-24     chapter unless the obligation is authorized in accordance with
9-25     Section 45.003, Education Code.
9-26           SECTION 12.  Subsection (c), Section 1502.055, Government
 10-1    Code, is amended to read as follows:
 10-2          (c)  This section does not apply to the sale of an
 10-3    unencumbered natural gas system owned by a municipality with a
 10-4    population of more than 100,000 [1.2 million].
 10-5          SECTION 13.  Section 55.16, Education Code, is amended to
 10-6    read as follows:
 10-7          Sec. 55.16.  BOARD RESPONSIBILITY.  (a)  Each board shall be
 10-8    authorized to fix and collect rentals, rates, and charges from
 10-9    students and others for the occupancy, services, use, and/or
10-10    availability of all or any of its property, buildings, structures,
10-11    activities, operations, or other facilities as provided by this
10-12    section.
10-13          (b)  Unless it is expressly provided by law that specified
10-14    funds under the control of a board are not considered revenue
10-15    funds, a provision in this title or another law that limits the
10-16    purpose for which funds under the control of the board may be spent
10-17    does not impair a board's ability to pledge and use all revenue
10-18    funds under the board's control to secure and pay obligations of
10-19    the board under this chapter or other law.
10-20          (c)  A board shall fix each rental, rate, charge, or fee that
10-21    the board has authority under this title to fix in an amount
10-22    determined to be necessary to pay or provide, for each activity or
10-23    service, all associated capital costs, including debt service,
10-24    operation and  maintenance costs, including associated overhead
10-25    costs of a system or institution, and prudent reserves.  Except as
10-26    otherwise provided by Subsection (e), this section does not
 11-1    authorize a board to impose a rental, rate, charge, or fee at an
 11-2    amount exceeding a limit imposed by another provision of this
 11-3    title.
 11-4          (d)  For billing and reporting purposes, a board shall
 11-5    accumulate all mandatory fees or charges provided for by this
 11-6    section or Chapter 54 as a separate facilities and services charge.
 11-7          (e)  [, in such amounts and in such manner as may be
 11-8    determined by the board.]  If bonds have been or are issued
 11-9    pursuant to this title, or secured or to be secured by a pledge of
11-10    part or all of the board's revenue funds, and if, at the time of
11-11    authorizing the issuance of the bonds, (1) the estimated maximum
11-12    amount per semester hour of such pledged revenue funds (based on
11-13    then current enrollment and conditions) during any future semester
11-14    necessary to provide for the payment of the principal of and
11-15    interest on the bonds when due, together with (2) the aggregate
11-16    amount of all such pledged revenue funds which were levied on a
11-17    semester hour basis for the then current semester to pay the
11-18    principal of and interest on all previously issued bonds, do not
11-19    exceed the amount permitted by this title, then any necessary fees,
11-20    tuition, rentals, rates, or other charges constituting revenue
11-21    funds shall be levied and collected when and to the extent required
11-22    by the resolution authorizing the issuance of the bonds in any
11-23    amount required to provide revenue funds sufficient for the payment
11-24    of the principal of and interest on the bonds, regardless of any
11-25    other provision or limitation provided by this title.
11-26          (f) [(b)]  A board is not required to charge students
 12-1    enrolled in different degree programs at the institution the same
 12-2    rentals, rates, charges, and fees under this section.
 12-3          SECTION 14.  (a)  All acts and proceedings of each governing
 12-4    board, as defined by Section 55.01, Education Code, and as used in
 12-5    Chapter 130, Education Code, relating to the establishment and
 12-6    collection of rates, rentals, charges, and fees are validated as of
 12-7    the dates they occurred.
 12-8          (b)  The provisions of this section do not apply to an act or
 12-9    proceeding that on September 1, 2001:
12-10                (1)  is involved in litigation, if the litigation
12-11    ultimately results in the act or proceeding being held invalid by a
12-12    final judgment of a court; or
12-13                (2)  has been held invalid by a final judgment of a
12-14    court.
12-15          SECTION 15.  This Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1759 passed the Senate on
         April 26, 2001, by the following vote:  Yeas 30, Nays 0, one
         present, not voting.
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1759 passed the House on
         May 23, 2001, by a non-record vote.
                                                Chief Clerk of the House