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AN ACT
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relating to financing tools for certain obligations for public |
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improvements and for certain obligations of The University of Texas |
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System. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1371.001, Government Code, is amended by |
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amending Subdivisions (1), (2), (4), (5), (7), and (8) and adding |
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Subdivision (3-a) to read as follows: |
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(1) "Credit agreement" means a loan agreement, |
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revolving credit agreement, agreement establishing a line of |
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credit, letter of credit, reimbursement agreement, insurance |
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contract, commitment to purchase obligations [an obligation], |
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purchase or sale agreement, interest rate management [swap] |
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agreement, or other commitment or [other] agreement authorized by a |
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governing body in anticipation of, related to, or in connection |
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with the authorization, issuance, sale, resale, security, |
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exchange, payment, purchase, remarketing, or redemption of some or |
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all of an issuer's obligations or interest on obligations [an
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obligation, interest on an obligation], or both, or as otherwise |
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authorized by this chapter. |
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(2) "Eligible project" means: |
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(A) the acquisition or construction of or an |
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improvement, addition, or extension to a public works, including a |
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capital asset or facility incident and related to the operation, |
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maintenance, or administration of the public works, and: |
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(i) with respect to a property or a facility |
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for the generation of electric power and energy, fuel acquisition |
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or the development or transportation of power, energy, or fuel; |
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(ii) with respect to a property or a |
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facility for a public transportation system: |
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(a) a building, terminal, garage, |
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shop, or other structure, rolling stock, equipment, or another |
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facility for mass public transportation; or |
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(b) a vehicle parking area or a |
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facility necessary or convenient for the beneficial use and access |
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of persons and vehicles to a station, terminal, yard, car, or bus, |
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or for the protection or environmental enhancement of a facility |
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for mass public transportation; and |
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(iii) with respect to a property or a |
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facility for a port facility, a wharf or dock, a warehouse, grain |
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elevator, or other storage facility, a bunkering facility, |
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port-related railroad or bridge, floating plant or facility, |
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lightering facility, cargo handling facility, towing facility, or |
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any other facility or aid incident to or useful in the operation of |
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a port facility; |
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(B) a causeway, bridge, tunnel, turnpike, |
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highway, or combination of those facilities, including: |
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(i) a necessary overpass, underpass, |
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interchange, entrance plaza, tollhouse, service station, approach, |
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fixture, accessory, or item of equipment, or a storage, |
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administration, or other necessary building; and |
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(ii) a property right or other interest |
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acquired in connection with those facilities; |
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(C) a public improvement owned by a county that |
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serves the purpose of attracting visitors and tourists to the |
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county, including a civic center, auditorium, exhibition hall, |
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coliseum, stadium, or parking area; |
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(D) a project for which there exists authorized |
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but unissued obligations approved by a majority of the voters of the |
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issuer or for which the issuer is authorized to issue other |
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indebtedness[, including obligations] payable from ad valorem |
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taxes; |
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(E) a project for which an issuer is authorized |
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to issue revenue bonds secured, in whole or in part, by revenue |
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derived from or related to student loans; or |
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(F) an approved venue project under Chapter 334 |
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or 335, Local Government Code. |
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(3-a) "Interest rate management agreement" means an |
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agreement that provides for an interest rate transaction, including |
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a swap, basis, forward, option, cap, collar, floor, lock, or hedge |
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transaction, a similar transaction, or any combination of those |
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types of transactions. The term includes: |
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(A) a master agreement that provides standard |
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terms for transactions; |
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(B) an agreement to transfer collateral as |
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security for transactions; or |
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(C) a confirmation of transactions. |
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(4) "Issuer" means: |
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(A) a home-rule municipality that: |
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(i) adopted its charter under Section 5, |
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Article XI, Texas Constitution; |
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(ii) has a population of 50,000 or more; and |
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(iii) has outstanding long-term |
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indebtedness that is rated by a nationally recognized rating agency |
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for municipal securities in one of the four highest rating |
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categories for a long-term obligation; |
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(B) a conservation and reclamation district |
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created and organized as a river authority under Section 52, |
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Article III, or Section 59, Article XVI, Texas Constitution; |
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(C) a joint powers agency organized and operating |
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under Chapter 163, Utilities Code; |
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(D) a metropolitan rapid transit authority or |
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regional transportation authority created, organized, and |
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operating under Chapter 451 or 452, Transportation Code; |
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(E) a conservation and reclamation district |
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organized or operating as a navigation district under Section 52, |
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Article III, or Section 59, Article XVI, Texas Constitution; |
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(F) a district organized or operating under |
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Section 59, Article XVI, Texas Constitution, that has all or part of |
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two or more municipalities within its boundaries; |
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(G) a state agency, including a state institution |
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of higher education; |
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(H) a hospital authority created or operating |
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under Chapter 262 or 264, Health and Safety Code, in a county that: |
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(i) has a population of more than 3.3 |
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million; or |
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(ii) is included, in whole or in part, in a |
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standard metropolitan statistical area of this state that includes |
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a county with a population of more than 2.2 million; |
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(I) a hospital district in a county that has a |
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population of more than two million; |
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(J) a nonprofit corporation organized to |
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exercise the powers of a higher education loan authority under |
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Section 53B.47(e), Education Code; |
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(K) a county: |
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(i) that has a population of 3.3 million or |
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more; or |
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(ii) that, on the date of issuance of |
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obligations under this chapter, has authorized, outstanding, or any |
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combination of authorized and outstanding, indebtedness of at least |
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$100 million secured by and payable from the county's ad valorem |
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taxes and the authorized long-term indebtedness of which is rated |
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by a nationally recognized rating agency of securities issued by |
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local governments in one of the four highest rating categories for a |
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long-term obligation; |
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(L) an independent school district that has an |
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average daily attendance of 50,000 or more as determined under |
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Section 42.005, Education Code; |
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(M) a municipality or county operating under |
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Chapter 334, Local Government Code; |
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(N) a district created under Chapter 335, Local |
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Government Code; [or] |
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(O) a junior college district that has a total |
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headcount enrollment of 40,000 or more based on enrollment in the |
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most recent regular semester; or |
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(P) an issuer, as defined by Section 1201.002, |
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that has: |
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(i) a principal amount of at least $100 |
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million in outstanding long-term indebtedness, in long-term |
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indebtedness proposed to be issued, or in a combination of |
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outstanding or proposed long-term indebtedness; and |
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(ii) some amount of long-term indebtedness |
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outstanding or proposed to be issued that is rated in one of the |
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four highest rating categories for long-term debt instruments by a |
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nationally recognized rating agency for municipal securities, |
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without regard to the effect of any credit agreement or other form |
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of credit enhancement entered into in connection with the |
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obligation. |
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(5) "Obligation" means a public security as defined by |
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Section 1201.002 or other [special] obligation that may [authorized
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to] be issued by an issuer and that is expected to be rated, and |
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before delivery[,] is rated, by a nationally recognized rating |
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agency for municipal securities in one of the three highest rating |
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categories for a short-term debt instrument or one of the four |
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highest rating categories for a long-term debt instrument. The |
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term does not include an obligation payable wholly or partly from ad |
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valorem taxes unless: |
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(A) issuance of the obligation or an obligation |
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refunded by the obligation has been approved by the voters of the |
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issuer in an election held for that purpose; or |
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(B) the issuer: |
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(i) is authorized by law to issue public |
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securities payable wholly or partly from ad valorem taxes for the |
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purpose for which the obligation is to be issued; and |
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(ii) has complied with any conditions |
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imposed by law before its pledge of ad valorem taxes to pay the |
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principal of or interest on the obligation [except as specifically
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permitted by this chapter]. |
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(7) "Project cost" means a cost or expense incurred in |
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relation to an eligible project. The term includes: |
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(A) design, planning, engineering, and legal |
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cost; |
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(B) acquisition cost of land or an interest in |
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land; |
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(C) construction cost; |
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(D) cost of machinery, equipment, and other |
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capital assets incident and related to the operation, maintenance, |
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and administration of an eligible project; and |
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(E) financing cost, including: |
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(i) interest on obligations and payments on |
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credit agreements during and after construction; |
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(ii) underwriter's discount or fee; and |
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(iii) cost of legal, financial, and other |
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professional services. |
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(8) "Public works" means property or a facility for: |
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(A) the conservation, storage, supply, |
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treatment, or transmission of water; |
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(B) the treatment, collection, or disposal of |
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water-carried wastes or solid wastes; |
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(C) the generation, transmission, or |
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distribution of electric power and energy; |
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(D) the acquisition, distribution, or storage of |
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gas; |
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(E) a transit authority system, as defined by |
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Section 451.001, Transportation Code, or a public transportation |
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system, as defined by Section 452.001 [Chapter 452], Transportation |
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Code; |
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(F) an airport as defined by Section 22.001, |
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Transportation Code; |
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(G) a port facility, including a facility for the |
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operation or development of a port or waterway or in aid of |
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navigation or navigation-related commerce in a port or on a |
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waterway; |
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(H) a project as defined by Section 284.001, |
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Transportation Code; or |
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(I) the carrying out of a purpose or function for |
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which an issuer may issue public securities. |
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SECTION 2. Subsection (a), Section 1371.003, Government |
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Code, is amended to read as follows: |
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(a) This chapter is wholly sufficient authority within |
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itself for the issuance of obligations, the execution of a credit |
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agreement, and the performance of the other acts and procedures |
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authorized by this chapter or under any agreement, without |
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reference to any other laws or any restrictions or limitations |
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contained in those laws. Any restrictions or limitations contained |
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in other laws do not apply to the procedures prescribed by this |
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chapter or to the issuance of obligations, the execution of credit |
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agreements, or the performance of other acts authorized by this |
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chapter. |
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SECTION 3. Section 1371.051, Government Code, is amended to |
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read as follows: |
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Sec. 1371.051. AUTHORITY TO ISSUE OBLIGATION. As |
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authorized and approved by the governing body of an issuer, the |
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governing body may issue, sell, and deliver an obligation to: |
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(1) finance a project cost; |
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(2) refund an obligation issued in connection with an |
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eligible project; or |
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(3) finance all or part of a payment owed or to be owed |
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on: |
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(A) the establishment of a [an interest rate
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lock, interest rate hedging agreement, or other] credit agreement; |
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or |
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(B) the settlement or termination, at maturity or |
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otherwise, of a [an interest rate lock, interest rate hedging
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agreement, or other] credit agreement, whether the settlement or |
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termination occurs: |
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(i) at the option of the issuer or the other |
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party to the credit agreement; or |
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(ii) by operation of the terms of the credit |
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agreement. |
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SECTION 4. Section 1371.056, Government Code, is amended to |
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read as follows: |
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Sec. 1371.056. AUTHORITY TO ENTER INTO AND EXECUTE CREDIT |
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AGREEMENTS. (a) An issuer [A governing body] may execute and |
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deliver any number of credit agreements in anticipation of, related |
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to, or [authorize the execution and delivery of a credit agreement] |
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in connection with [or related to] the authorization, issuance, |
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security, purchase, payment, sale, resale, redemption, |
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remarketing, or exchange of some or all of the issuer's obligations |
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or interest on obligations, or both, [an obligation] at any time, |
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without regard to whether the: |
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(1) obligations have been authorized or issued; or |
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(2) [a] credit agreement was contemplated, |
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authorized, or executed in relation to the initial issuance, sale, |
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or delivery of the obligations [obligation]. |
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(b) Except as provided by this section, a [A] credit |
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agreement must substantially contain the terms and be for the |
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period the governing body approves. A credit agreement may provide |
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that it: |
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(1) may be terminated with or without cause; or |
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(2) becomes effective at the option of another party |
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to the credit agreement, if the governing body first finds that the |
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option serves best the interests of the issuer. |
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(c) The governing body may delegate to any number of |
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officers or employees of the issuer the authority to approve |
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specific terms of, to execute and deliver, or to terminate or amend |
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in accordance with its terms, a credit agreement or transactions |
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under a credit agreement on the behalf of the issuer, subject to any |
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condition the governing body specifies. The delegation must |
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include limits on: |
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(1) the principal amount or the notional amount; |
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(2) the term; |
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(3) the rate; |
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(4) the source of payment; |
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(5) the security; |
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(6) the identity or credit rating of an authorized |
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counterparty; |
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(7) the duration of the authorization; and |
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(8) for an interest rate management agreement, the: |
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(A) fixed or floating rates; |
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(B) economic consequences; |
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(C) early termination provisions; |
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(D) type; |
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(E) provider; and |
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(F) costs of credit enhancement. |
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(d) The cost to the issuer of a credit agreement or payments |
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owed by an issuer under a credit agreement may be paid from and |
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secured by any source, including: |
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(1) the proceeds from the sale of the obligation to |
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which the credit agreement relates; |
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(2) any revenue and money of the issuer that is |
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available to pay the obligation; |
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(3) any interest on the obligation or that may |
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otherwise be legally used; or |
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(4) ad valorem taxes if the credit agreement is |
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authorized in anticipation of, in relation to, or in connection |
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with an obligation that is wholly or partly payable from or is to be |
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wholly or partly payable from ad valorem taxes [to the extent
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permitted by this chapter]. |
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(e) [(d)] A credit agreement is an agreement for |
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professional services but is not a contract subject to Subchapter |
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I, Chapter 271, Local Government Code. |
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(f) If a credit agreement is authorized and is executed in |
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anticipation of the issuance of an obligation described by Section |
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1371.001(5)(B) because the issuer is authorized by Subchapter C, |
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Chapter 271, Local Government Code, to issue certificates of |
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obligation: |
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(1) notice required by Section 271.049, Local |
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Government Code, in addition to the other requirements for the |
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notice, must describe the time and place tentatively set for the |
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adoption of the order or ordinance authorizing the credit |
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agreement, the maximum amount and term of the obligations and |
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credit agreement, and the manner in which the certificates of |
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obligation and credit agreement will be paid; and |
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(2) the issuer may enter into the credit agreement and |
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issue the certificates of obligation only if: |
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(A) the municipal secretary or clerk or person |
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with similar authority does not receive a petition signed by at |
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least five percent of the registered voters of the issuer that |
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protests the issuance of the certificates of obligation or the |
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execution of the credit agreement before the later of the date |
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tentatively set for the adoption of the order or ordinance to |
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authorize the credit agreement or the date the order or ordinance is |
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adopted; |
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(B) the issuance and execution are approved at an |
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election held for that purpose conducted as provided for a bond |
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election under Chapter 1251; or |
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(C) notice is not required by Section 271.049, |
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Local Government Code, before the certificates of obligation are |
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authorized. |
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(g) Payments received by an issuer under a credit agreement |
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or on termination of all or part of a credit agreement may be used |
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to: |
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(1) pay the obligations in anticipation of which, in |
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relation to which, or in connection with which the credit agreement |
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was entered into or pay the costs to be financed by the obligations |
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in anticipation of which, in relation to which, or in connection |
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with which the credit agreement was entered into; |
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(2) pay other liabilities or expenses that are secured |
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on parity with or senior to the obligations in anticipation of |
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which, in relation to which, or in connection with which the credit |
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agreement was entered into; or |
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(3) after the satisfaction of the obligations or costs |
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described by Subdivision (1) and of the liabilities and expenses |
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described by Subdivision (2) that are due, make payments for any |
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other purpose for which the issuer may issue obligations under this |
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subchapter or that is otherwise authorized by law, unless the |
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credit agreement is paid primarily from ad valorem taxes. |
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(h) An issuer may agree to pay or receive a payment on early |
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termination of an interest rate management agreement due to a |
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breach or for another reason as provided by the interest rate |
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management agreement. The agreement may specify the payment by a |
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specific amount, by a formula, or by a process or algorithm. |
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(i) A credit agreement secured in the manner described by |
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Subsection (d)(4) may be executed without an election or the |
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imposition of an ad valorem tax for the credit agreement unless |
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required by the Texas Constitution. If the Texas Constitution |
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requires an election for the credit agreement, the election must be |
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held substantially in the manner provided for an election under |
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Chapter 1251. |
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(j) An issuer may enter into an interest rate management |
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agreement transaction only: |
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(1) if the issuer has either entered into at least |
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three interest rate management transactions before November 1, |
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2006, or has entered into one or more interest rate management |
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transactions with notional amounts totaling at least $400 million |
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before that date; or |
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(2) as provided by Subsection (k). |
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(k) An issuer may enter into an interest rate management |
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transaction if: |
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(1) the governing body has adopted, amended, or |
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ratified during the preceding two years a risk management policy |
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governing entering into and managing interest rate management |
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agreements and transactions that addresses: |
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(A) conditions, if any, under which the issuer |
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may enter into an interest rate management agreement transaction |
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without independent advice from a financial advisor or swap advisor |
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who has experience in interest rate management transactions; and |
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(B) authorized purposes, permitted types and |
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creditworthiness of counterparties, credit risks and other risks, |
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liquidity, methods of selection of counterparties, and limits |
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concerning awarding a transaction, monitoring, and exposure; |
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(2) the issuer has received from the counterparty: |
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(A) if the transaction was not awarded through a |
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competitive bidding process: |
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(i) a statement that, in the counterparty's |
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judgment, the difference in basis points between the rate of the |
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transaction and the mid-market rate for a comparable transaction |
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falls within the commonly occurring range for comparable |
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transactions; |
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(ii) a statement of the amount of the |
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difference as determined by the counterparty; or |
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(iii) if the counterparty does not know of a |
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comparable transaction or mid-market rate, a statement of another |
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suitable measure of pricing acceptable to the counterparty; and |
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(B) the counterparty's disclosure of any |
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payments the counterparty made to another person to procure the |
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transaction; and |
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(3) the governing body or an authorized officer or |
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employee of the issuer has determined that the transaction will |
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conform to the issuer's interest rate management agreement policy |
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after reviewing a report of the chief financial officer of the |
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issuer that identifies with respect to the transaction: |
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(A) its purpose; |
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(B) the anticipated economic benefit and the |
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method used to determine the anticipated benefit; |
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(C) the use of the receipts of the transaction; |
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(D) the notional amount, amortization, and |
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average life compared to the related obligation; |
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(E) any floating indices; |
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(F) its effective date and duration; |
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(G) the identity and credit rating of the |
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counterparties; |
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(H) the cost and anticipated benefit of |
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transaction insurance; |
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(I) the financial advisors and the legal advisors |
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and their fees; |
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(J) any security for scheduled and early |
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termination payments; |
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(K) any associated risks and risk mitigation |
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features; and |
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(L) early termination provisions. |
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(l) While an interest rate management agreement transaction |
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is outstanding, the governing body of the issuer shall review and |
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ratify or modify its related risk management policy at least |
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biennially [(e) Notwithstanding Subsection (b), the governing body
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may delegate to an officer or employee the authority, under the
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terms and for the period approved by the governing body, to:
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[(1)
enter into a credit agreement and transactions
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under a credit agreement; and
|
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[(2)
execute any instruments in connection with those
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transactions]. |
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SECTION 5. Section 1371.057, Government Code, is amended to |
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read as follows: |
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Sec. 1371.057. REVIEW AND APPROVAL OF OBLIGATION, CREDIT |
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AGREEMENT, AND CONTRACT BY ATTORNEY GENERAL. (a) Before an |
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obligation may be issued or a credit agreement executed, a record of |
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the proceedings of the issuer authorizing the issuance, execution, |
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and delivery of the obligation or[, the] credit agreement[,] and |
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any contract providing revenue or security to pay the obligation or |
|
[the] credit agreement must be submitted to the attorney general |
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for review. |
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(b) If the attorney general finds that the [credit
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agreement, contract, and other authorizing] proceedings |
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authorizing an obligation or credit agreement conform to the |
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requirements of the Texas Constitution and this chapter, the |
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attorney general shall approve them and deliver to the comptroller |
|
a copy of the attorney general's legal opinion stating that |
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approval and the record of proceedings. After approval, the |
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obligation or [and] credit agreement may be executed and delivered, |
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exchanged, or refinanced from time to time in accordance with those |
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authorizing proceedings. |
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(c) If the [obligation] authorization of an obligation or of |
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a credit agreement provides that the issuer intends to refinance |
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the [an] obligation or a payment [loan] under the [a] credit |
|
agreement with refunding bonds issued under Chapter 1207, then the |
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obligation or payment [loan] shall be treated, for purposes of |
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attorney general review and approval, as having the intended term |
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and payment schedule of the refunding bonds. |
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SECTION 6. Section 1371.059, Government Code, is amended to |
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read as follows: |
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Sec. 1371.059. VALIDITY AND INCONTESTABILITY. (a) If |
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proceedings to authorize an obligation or credit agreement are |
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approved [On approval] by the attorney general and registered[,
|
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registration] by the comptroller, each obligation or [and initial
|
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delivery of the obligation, a] credit agreement, as applicable, |
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or[,] a contract providing revenue or security included in or |
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executed and delivered according to[, an initial obligation, and
|
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any obligation subsequently issued under] the authorizing |
|
proceedings is [are] incontestable in a court or other forum and is |
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[are] valid, [and] binding, and [obligations] enforceable |
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according to its [their] terms. |
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(b) Notwithstanding Subsection (a) and Section 1371.003, |
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and except as provided by this subsection, an obligation authorized |
|
by this chapter is not valid, binding, or enforceable unless the |
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obligation is approved by the attorney general and registered by |
|
the comptroller in accordance with Chapter 1202. The attorney |
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general's approval and registration by the comptroller is not |
|
required for an obligation: |
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(1) to which Chapter 1202 does not apply or that is |
|
exempt from approval and registration as provided by Section |
|
1202.007(a)(1), (2), (3), (4), (6), or (7); or |
|
(2) that matures within one year after the issuer |
|
receives payment for the obligation, regardless of whether the |
|
obligation is evidenced by an instrument with a nominal term of |
|
longer than one year. |
|
(c) An issuer in the proceedings to authorize obligations or |
|
a credit agreement, or in a credit agreement, may agree to waive |
|
sovereign immunity from suit or liability for the purpose of |
|
adjudicating a claim to enforce the credit agreement or obligation |
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or for damages for breach of the credit agreement or obligation. |
|
This subsection does not apply to an issuer that is: |
|
(1) a state agency, including a state institution of |
|
higher education; or |
|
(2) a county with a population of 900,000 or more. |
|
SECTION 7. Subchapter B, Chapter 1371, Government Code, is |
|
amended by adding Section 1371.061 to read as follows: |
|
Sec. 1371.061. MANAGEMENT REPORTS. (a) If a governing |
|
body authorizes an interest rate management agreement transaction, |
|
the governing body shall designate an officer of the issuer to |
|
monitor and report on the transaction. At least annually, the |
|
designated officer shall present to the governing body a written |
|
report, signed by the designated officer, on all outstanding |
|
interest rate management agreement transactions conducted for the |
|
issuer. The report must: |
|
(1) describe the terms of the transactions; |
|
(2) contain a statement: |
|
(A) of the fair value of each transaction; |
|
(B) of the value of any collateral posted to or by |
|
the issuer under the transactions with each counterparty at the |
|
year's end; and |
|
(C) reviewing the transactions' cash flows; |
|
(3) identify with respect to each transaction the |
|
counterparty, any guarantor of the counterparty's obligations |
|
under the transaction, and the credit ratings of the counterparty |
|
and the guarantor; and |
|
(4) state whether the continuation of the transactions |
|
under the agreement would comply with the issuer's interest rate |
|
management agreement policy. |
|
(b) This section does not apply to an issuer that has |
|
entered into: |
|
(1) at least three interest rate management agreement |
|
transactions before November 1, 2006; or |
|
(2) one or more interest rate management agreement |
|
transactions with notional amounts totaling at least $400 million |
|
before November 1, 2006. |
|
SECTION 8. Subchapter C, Chapter 65, Education Code, is |
|
amended by adding Section 65.461 to read as follows: |
|
Sec. 65.461. BOND ENHANCEMENT AGREEMENTS. (a) In this |
|
section: |
|
(1) "Bond" or "note" means a bond or note that the |
|
board is authorized to issue according to law, including Section |
|
18, Article VII, Texas Constitution, Chapter 55 or 66 of this code, |
|
or other applicable law. |
|
(2) "Bond enhancement agreement" means an interest |
|
rate swap agreement, a currency swap agreement, a forward payment |
|
conversion agreement, an agreement providing for payments based on |
|
levels of or changes in interest rates or currency exchange rates, |
|
an agreement to exchange cash flows or a series of payments, or |
|
other agreement, including an option, put, or call, to hedge or |
|
modify payment, currency, rate, spread, or other exposure. |
|
(b) The board may at any time and from time to time enter |
|
into one or more bond enhancement agreements that the board |
|
determines to be necessary or appropriate to place the obligation |
|
of the board, as represented by the bonds or notes issued or to be |
|
issued, in whole or in part, on the interest rate, currency, cash |
|
flow, or other basis desired by the board. A bond enhancement |
|
agreement is an agreement for professional services and shall |
|
contain the terms and conditions and be for the period that the |
|
board authorizes. The fees and expenses of the board in connection |
|
with a bond enhancement agreement, including any payments due from |
|
the board under a bond enhancement agreement, may be paid from and |
|
secured by a lien on and pledge of all or any part of any of the |
|
revenue funds of the board and its institutions, proceeds of the |
|
sale of bonds or notes to which the bond enhancement agreement |
|
relates, or from any other source that is legally available for the |
|
purpose of paying the bonds or notes and the interest on the bonds |
|
or notes or that may otherwise be legally available to make those |
|
payments. Payments due from the board under a bond enhancement |
|
agreement relating to bonds or notes issued pursuant to Section 18, |
|
Article VII, Texas Constitution, are deemed to be for the support |
|
and maintenance of The University of Texas System administration |
|
and may be paid from the available university fund. |
|
(c) The resolution of the board authorizing a bond |
|
enhancement agreement may authorize one or more designated officers |
|
or employees of the board to act on behalf of the board in entering |
|
into and delivering the bond enhancement agreement and in |
|
determining or setting the counterparty and terms of the bond |
|
enhancement agreement specified in the resolution. |
|
(d) The resolution of the board authorizing a financing |
|
program pursuant to Section 65.46 may include authorization of one |
|
or more bond enhancement agreements. |
|
(e) Unless the board or its designee elects otherwise in its |
|
authorization or approval of a bond enhancement agreement, the bond |
|
enhancement agreement is not a credit agreement for purposes of |
|
Chapter 1371, Government Code, or Section 65.46 of this chapter, or |
|
any successor to such laws, regardless of whether the bonds or notes |
|
relating to the bond enhancement agreement were issued in part |
|
under either such law. |
|
(f) This section shall be construed liberally to effect the |
|
legislative intent and purposes of this section, and all powers |
|
granted by this section shall be broadly interpreted to effect that |
|
intent and those purposes and not as a limitation of powers. |
|
SECTION 9. The changes in law made by this Act apply only to |
|
proceedings related to authorizing the issuance of obligations or |
|
the execution of credit agreements or interest rate management |
|
agreements that are adopted on or after the effective date of this |
|
Act and to transactions related to the obligations or agreements. |
|
Proceedings related to authorizing the issuance of obligations or |
|
the execution of credit agreements or interest rate management |
|
agreements that are adopted before the effective date of this Act, |
|
and transactions related to the obligations or agreements, are |
|
governed by the law in effect on the date the proceedings were |
|
initiated and the former law is continued in effect for that |
|
purpose. |
|
SECTION 10. An agreement described by this section is |
|
ratified in all respects, without regard to whether the agreement |
|
to waive sovereign immunity is limited to the extent permitted by |
|
law, if the agreement: |
|
(1) is entered into before the effective date of this |
|
Act by an issuer as defined by Subdivision (4), Section 1371.001, |
|
Government Code, that has authority by statute or under its charter |
|
to sue and be sued or to plead and be impleaded; and |
|
(2) waives sovereign immunity from suit or liability |
|
for breach of an obligation or of a credit agreement authorized by |
|
Chapter 1371, Government Code. |
|
SECTION 11. 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. |
|
|
|
|
|
|
|
|
______________________________ |
______________________________ |
|
President of the Senate |
Speaker of the House |
|
|
I hereby certify that S.B. No. 968 passed the Senate on |
|
April 19, 2007, by the following vote: Yeas 31, Nays 0; and that |
|
the Senate concurred in House amendment on May 25, 2007, by the |
|
following vote: Yeas 30, Nays 0. |
|
|
|
|
______________________________ |
|
Secretary of the Senate |
|
|
I hereby certify that S.B. No. 968 passed the House, with |
|
amendment, on May 17, 2007, by the following vote: Yeas 146, |
|
Nays 0, two present not voting. |
|
|
|
|
______________________________ |
|
Chief Clerk of the House |
|
|
|
|
|
Approved: |
|
|
|
______________________________ |
|
Date |
|
|
|
|
|
______________________________ |
|
Governor |