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By:  Solis                                                        H.B. No. 3365



A BILL TO BE ENTITLED

AN ACT

relating to the use of excess proceeds of certificates of 
obligation.       
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter C, Chapter 271, Local Government Code 
is amended by adding Section 271.0462 to read as follows:
	Sec. 271.0462.  CHANGE IN USE OF PROCEEDS.  The governing 
body of an issuer may change the use of proceeds of outstanding 
certificates for other purposes permitted under this subchapter:  
(a)  If the costs of the new project to be financed does not exceed 
10 percent of the original principal amount of the outstanding 
certificates, the governing body may pass a resolution authorizing 
such proceeds to be used for such purpose.
	(b)  If the cost of the new project(s) exceed 10 percent of 
the original principal amount of the outstanding certificates, the 
governing body must publish notice of its intent to adopt a 
resolution authorizing the use of proceeds to finance such new 
project(s) in the same manner as prescribed in section 271.049 and 
if five percent of the qualified voters file a written petition 
protesting such proposal, an election shall be held as described in 
section 271.049.
	SECTION 2.  EFFECTIVE DATE.  This Act takes effect 
immediately if it receives a vote of two-thirds of all 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, 2005.