80R5688 JRD-F

By: Eiland H.B. No. 3270

A BILL TO BE ENTITLED

AN ACT

relating to authorizing the issuance of anticipation notes or other obligations by issuers located along the Gulf Coast in the event of an emergency.

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

SECTION 1. Section 1431.004, Government Code, is amended by adding Subsection (e) to read as follows:

(e) An issuer, other than an eligible school district, may use the proceeds of an anticipation note or other obligation issued under Section 1431.015:

(1) for purposes described by Subsection (a); or

(2) to pay for:

(A) employee salaries;

(B) the lease of materials, supplies, equipment, machinery, buildings, lands, and rights-of-way for the issuer's authorized needs and purposes;

(C) the demolition of dangerous structures or the restoration of historic structures;

(D) economic development grants made under Chapter 380, Local Government Code; or

(E) the accomplishment of any other purpose the issuer considers necessary in relation to preserving or protecting the public health and safety.

SECTION 2. Section 1431.006, Government Code, is amended to read as follows:

Sec. 1431.006. LIMITATION ON NOTES TO PAY EXPENSES. (a) Anticipation notes issued for the purposes described by Section 1431.004(a)(2) may not, in the fiscal year in which the attorney general approves the notes:

(1) for a municipality, exceed 75 percent of the revenue or taxes anticipated to be collected in that year;

(2) for a county or an eligible countywide district, exceed 50 percent of the revenue or taxes anticipated to be collected in that year; or

(3) for an eligible school district, exceed 75 percent of the income of the district for the fiscal year preceding that year.

(b) This section does not apply to an anticipation note or other obligation issued under Section 1431.015.

SECTION 3. Section 1431.007, Government Code, is amended by adding Subsection (c) to read as follows:

(c) A governing body issuing an anticipation note or other obligation under Section 1431.015 may:

(1) provide that the anticipation note or other obligation be paid from and secured by any revenue, including sales taxes, other taxes, a combination of nontax and tax revenue, the proceeds of bonds to be issued by the issuer, and reimbursements or other funds to be received from the Federal Emergency Management Agency or any other state or federal agency reimbursing or providing funds to the issuer for costs incurred as a result of the emergency; and

(2) pledge to the payment of the anticipation note or other obligation any revenue, including sales taxes, other taxes, a combination of nontax and tax revenue, the proceeds of bonds to be issued by the issuer, and reimbursements or other funds to be received from the Federal Emergency Management Agency or any other state or federal agency reimbursing or providing funds to the issuer for costs incurred as a result of the emergency.

SECTION 4. Section 1431.009, Government Code, is amended by amending Subsections (a) and (c) and adding Subsection (e) to read as follows:

(a) Except as provided by Subsection (b) or (e), an anticipation note issued for a purpose described by Section 1431.004(a)(1) or (b)(2) must mature before the seventh anniversary of the date that the attorney general approves the note.

(c) Except as provided by Subsection (e), an [An] anticipation note issued for a purpose described by Section 1431.004(a)(2) or (3) must mature before the first anniversary of the date that the attorney general approves the note.

(e) An anticipation note or other obligation issued under Section 1431.015 for any authorized purpose must mature before the 10th anniversary of the date the attorney general approves the note or other obligation.

SECTION 5. Section 1431.012, Government Code, is amended to read as follows:

Sec. 1431.012. RESTRICTION ON CERTAIN CONTRACTS PAYABLE FROM PROCEEDS OF NOTES. (a) Except as provided by Subsection (b), a [A] county must comply with the competitive bidding requirements of Subchapter C, Chapter 271, Local Government Code, in connection with a contract to be paid from the proceeds of anticipation notes issued for a purpose described by Section 1431.004(a)(1)(A).

(b) Competitive bidding requirements do not apply to an anticipation note or other obligation issued under Section 1431.015 for any authorized purpose.

SECTION 6. Chapter 1431, Government Code, is amended by adding Sections 1431.015, 1431.016, and 1431.017 to read as follows:

Sec. 1431.015. CERTAIN NOTES OR OTHER OBLIGATIONS FOR EMERGENCY FINANCING. (a) In this section, "emergency" means the occurrence of widespread or severe damage, injury, or loss of life or property affecting an area in the jurisdiction of an issuer and resulting from a hurricane or tropical storm, including wind damage, fire damage, damage from wave action, or flood damage resulting from the hurricane or tropical storm.

(b) Notwithstanding any other provision of this chapter, an issuer located within 70 miles of the Gulf of Mexico or of a bay or inlet of the gulf may authorize the issuance of an anticipation note or other obligation in the event of an emergency.

(c) The issuer shall deliver to the attorney general, in accordance with Section 1431.017, a transcript of proceedings related to the issuance of an anticipation note or other obligation issued under this section. However, before delivery of an anticipation note or other obligation issued under this section:

(1) the governor must have issued an executive order or proclamation under Chapter 418 declaring a state of disaster and designating the area affected by the emergency;

(2) the governing body acting through its presiding officer under Chapter 418 must have declared a local state of disaster designating the area affected by the emergency; or

(3) the governor must have proclaimed under Chapter 433 a state of emergency designating the area affected by the emergency.

Sec. 1431.016. CONFLICTS WITH MUNICIPAL CHARTER. To the extent of a conflict between a municipal charter and any provision of this chapter relating to an anticipation note or other obligation issued under Section 1431.015, this chapter controls.

Sec. 1431.017. ATTORNEY GENERAL REVIEW. Following authorization of an anticipation note or other obligation under Section 1431.015, the issuer shall submit to the attorney general a transcript of proceedings related to issuance of the anticipation note or other obligation and provide preliminary approval and fulfill other requirements relating to the issuance of the anticipation note or other obligation. On the occurrence of an emergency affecting the issuer, the attorney general shall expeditiously review and approve delivery of the anticipation note or other obligation subject to the issuer's compliance with preliminary approval requirements.

SECTION 7. 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.