80R15145 MXM-D

By: Macias H.B. No. 3125

A BILL TO BE ENTITLED

AN ACT

relating to the issuance of bonds or other obligations by library districts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 326, Local Government Code, is amended by adding Subchapter F to read as follows:

SUBCHAPTER F. MONEY FOR LIBRARY SYSTEM; BONDS

Sec. 326.151. DEFINITIONS. In this subchapter:

(1) "Bond" has the meaning assigned to "public security" by Section 1201.002, Government Code.

(2) "Credit agreement" has the meaning assigned by Section 1371.001, Government Code.

Sec. 326.152. MONEY FOR LIBRARY SYSTEM. (a) The board may provide money to acquire, purchase, construct, improve, renovate, enlarge, or equip property, buildings, structures, or related infrastructure for a public library.

(b) In connection with exercising the authority to provide money for a purpose described by Subsection (a), the board may provide money to acquire, purchase, or otherwise obtain any interest in property.

Sec. 326.153. AUTHORITY TO ISSUE BONDS. The board may issue bonds and incur obligations under contracts in accordance with this chapter for a purpose described by Section 326.152.

Sec. 326.154. PLEDGE OF REVENUE AND SALES TAXES. (a) The board may pledge to the payment of any bonds issued or any obligations incurred under Section 326.153 all or any part of the revenue of the district's library system or the district's sales and use tax.

(b) The board may grant a lien on the pledged revenue. The lien has the priority determined by the board.

Sec. 326.155. GRANT OF MORTGAGE OR FRANCHISE. As additional security for district bonds or other obligations, the district by the terms of the encumbrance may grant a purchaser under sale or foreclosure a mortgage or a franchise to operate the encumbered library system for a term not to exceed 20 years from the date of purchase, subject to all laws regulating the operation of the library system in force at the time of the sale or foreclosure.

Sec. 326.156. USE AND INVESTMENT OF PROCEEDS. (a) To the extent provided by the proceedings authorizing the issuance of district bonds, a district may use proceeds from the sale of district bonds to provide money for a library system under this chapter for a purpose authorized by Section 326.152.

(b) A district may use proceeds from the sale of district bonds to pay interest on the bonds during the period of the acquisition or construction of any property to be provided through the issuance of the bonds, and for one year after completion of the acquisition or construction of the property.

(c) A district may use proceeds from the sale of district bonds to:

(1) provide a reserve for the payment of debt service on the bonds;

(2) provide a reserve for extraordinary repairs and replacements; or

(3) obtain a credit agreement as provided by Section 326.159.

(d) A district may invest proceeds from the sale of district bonds to the extent and in the manner provided in the proceedings authorizing the issuance of the bonds.

Sec. 326.157. MATURITY. District bonds must mature not later than 30 years after their date of issuance.

Sec. 326.158. ADDITIONAL OBLIGATIONS TO IMPROVE OR EXTEND LIBRARY SYSTEM. (a) A district that has outstanding bonds secured by library system revenue may issue additional bonds or incur other obligations for a purpose described by Section 326.152.

(b) Except as provided by Subsection (c), district bonds issued under Subsection (a) are a lien on the library system revenue:

(1) in the order of issuance; and

(2) inferior to a lien securing payment of outstanding bonds.

(c) A district may issue additional bonds under this section on a parity and of equal dignity with the outstanding bonds if the resolution, order, deed of trust, or indenture of trust authorizing or securing the outstanding bonds provides for the subsequent issuance of additional parity bonds, subject to that resolution, order, deed of trust, or indenture of trust.

(d) To the extent of a conflict or inconsistency between this section and another law, this section controls.

Sec. 326.159. CREDIT AGREEMENT FOR RESERVE FUND. (a) The board may provide that in lieu of or in addition to providing a cash reserve, a credit agreement may be used to provide the reserve.

(b) A credit agreement obtained to provide a reserve must be submitted to the attorney general for examination and approval. After approval by the attorney general, the credit agreement is incontestable in any court or other forum for any reason and is a binding obligation of the district in accordance with its terms for all purposes.

SECTION 2. 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, 2007.