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78R4771 JJT-F


By:  Capelo                                                       H.B. No. 1934



A BILL TO BE ENTITLED

AN ACT

relating to security and payment for, and the use of the proceeds 
of, certain public securities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 1201.042, Government Code, is amended by 
amending Subsection (a) and adding Subsections (d) and (e) to read 
as follows:
	(a)  An [If an issuer is authorized by law to secure and pay 
any portion of a public security with revenue derived from the 
ownership or operation of a project or facility, the] issuer may use 
the proceeds of a [the] public security issued to finance the 
acquisition, construction, or improvement of a project or facility
to:
		(1)  pay interest on the public security while the 
project or facility is being acquired, [or] constructed, or 
improved and for the year after it is acquired, [or] constructed, or 
improved;
		(2)  operate and maintain the project or facility 
during the estimated period of acquisition, [or] construction, or 
improvement of the project or facility and for one year after it is 
acquired, [or] constructed, or improved;
		(3)  finance other funds relating to the public 
security, including debt service reserve and contingency;  and
		(4)  pay the cost or expense of the issuance of the 
public security.        
	(d)  An issuer may spend a premium received by the issuer as 
part of the purchase price of public securities sold at a public or 
private sale:
		(1)  to provide for payment of debt service on the 
public securities sold;
		(2)  to contribute to an escrow established to provide 
for payment of debt service on obligations being refunded through 
the sale of the public securities;
		(3)  to pay the cost or expense of issuing the public 
securities; or 
		(4)  to pay any other cost related to the purpose for 
which the public securities were issued, as specified in the public 
security authorization.
	(e)  Subsection (d)(4) does not authorize an issuer to spend 
money in an amount that exceeds limitations provided by other law or 
by the public security authorization.
	SECTION 2.  Section 1431.007(a), Government Code, is amended 
to read as follows:
	(a)  Except as provided by Subsection (b), a governing body 
may:             
		(1)  provide that anticipation notes be paid from and 
secured by revenue, taxes, a combination of revenue and taxes, or 
the proceeds of bonds to be issued by the issuer;  and
		(2)  pledge to the payment of anticipation notes 
revenue, taxes,  a combination of revenue and taxes, or the proceeds 
of bonds to be issued by the issuer.
	SECTION 3.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.