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A BILL TO BE ENTITLED
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AN ACT
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relating to the establishment of debt management policies and |
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guidelines by the Bond Review Board. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1201.027, Government Code, is amended by |
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adding Subsections (d) and (e) to read as follows: |
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(d) Subsection (a) does not impair the authority of the Bond |
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Review Board to approve issuance costs under Section 1231.081 for |
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services described by Subsection (a). |
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(e) An issuer of a state security, as defined by Section |
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1231.001, that selects or contracts with a person to provide |
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services under Subsection (a) shall submit to the Bond Review |
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Board: |
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(1) the request for proposals to provide the services |
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not later than the seventh day before the date the request for |
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proposals is published; |
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(2) each final proposal received to provide the |
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services before a contract for the services is entered into by the |
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issuer; and |
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(3) documentation required by the board relating to a |
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contract entered into by an issuer for services under Subsection |
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(a), including an explanation for the selection of the service |
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provider, not later than the seventh day after the date the issuer |
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entered into the contract. |
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SECTION 2. Subchapter B, Chapter 1231, Government Code, is |
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amended by adding Sections 1231.024 and 1231.025 to read as |
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follows: |
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Sec. 1231.024. DEBT MANAGEMENT COMMITTEE. (a) The debt |
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management committee is created to provide the board with: |
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(1) expertise on debt-related issues, matters, and |
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concerns; |
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(2) assistance on debt-related projects, as |
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necessary; |
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(3) policy guidance for the debt affordability study |
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required under Section 1231.063; and |
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(4) assistance and expertise on evaluating and ranking |
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capital project proposals under Section 1231.025. |
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(b) The committee consists of one representative of state |
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issuers, selected by the executive director of the board, and one |
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representative from each of the following: |
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(1) the board; |
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(2) the Texas Public Finance Authority; |
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(3) the Texas Higher Education Coordinating Board; |
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(4) the attorney general; |
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(5) the comptroller; |
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(6) the governor; |
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(7) the Legislative Budget Board; |
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(8) the lieutenant governor; |
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(9) the speaker of the house of representatives; |
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(10) the Senate Finance Committee; and |
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(11) the House Appropriations Committee. |
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(c) Chapter 2110 does not apply to the committee. |
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Sec. 1231.025. CAPITAL PROJECT EVALUATION. (a) The board |
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by rule shall develop procedures for evaluating and ranking by |
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priority each capital project proposal by using objective criteria |
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to compare each proposal to other proposals. |
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(b) State agencies must comply with a rule adopted under |
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Subsection (a) requiring the submission of capital project |
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proposals to the board. |
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SECTION 3. Subchapter C, Chapter 1231, Government Code, is |
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amended by adding Section 1231.045 to read as follows: |
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Sec. 1231.045. INTEREST RATE SWAP AGREEMENTS. Subject to |
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the procedures provided by Sections 1231.042 and 1231.043, an |
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entity that issues a state security may not enter into an interest |
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rate swap agreement related to the state security unless: |
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(1) the board approves the agreement; or |
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(2) the related security is exempted under Section |
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1231.022(2). |
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SECTION 4. Subchapter D, Chapter 1231, Government Code, is |
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amended by adding Section 1231.063 to read as follows: |
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Sec. 1231.063. DEBT AFFORDABILITY STUDY. (a) The board, in |
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consultation with the Texas Public Finance Authority and the |
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Legislative Budget Board, shall annually prepare a study regarding |
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the state's current debt burden by: |
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(1) analyzing the state's historical debt use, |
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financial and economic resources, capital project evaluations, and |
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long-term goals for capital needs to determine the amount of |
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additional debt the state can accommodate; and |
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(2) monitoring how annual changes and new debt |
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authorizations affect the mechanism described in Subsection (b). |
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(b) The study must include a mechanism that can be used to |
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determine the state's debt affordability and serve as a guideline |
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for debt authorizations and debt service appropriations. The |
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mechanism must be designed to calculate: |
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(1) the debt service as a percentage of unrestricted |
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revenues; |
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(2) the ratio of not self-supporting debt to personal |
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income; |
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(3) the amount of not self-supporting debt per capita; |
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(4) the rate of debt retirement; and |
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(5) the ratio of not self-supporting debt service to |
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budgeted or expended general revenue. |
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(c) Not later than December 1 of each year, the board shall |
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submit the annual study to: |
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(1) the governor; |
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(2) the comptroller; |
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(3) the presiding officer of each house of the |
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legislature; and |
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(4) the Senate Finance Committee and House |
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Appropriations Committee. |
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(d) The annual study submitted under Subsection (c) must |
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include a target and limit for debt service as a percentage of |
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unrestricted revenues. |
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SECTION 5. Section 1231.081, Government Code, is amended by |
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adding Subsection (d) to read as follows: |
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(d) Each entity that issues a state security must submit to |
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the board for prior approval all proposed issuance costs described |
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by Subsection (c) while planning the issuance of the state |
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security. |
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SECTION 6. Section 2306.351, Government Code, is amended by |
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adding Subsection (e) to read as follows: |
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(e) The Bond Review Board must approve an interest rate swap |
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agreement authorized under this section before the department may |
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enter into the agreement. |
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SECTION 7. Section 161.074, Natural Resources Code, is |
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amended by adding Subsection (d) to read as follows: |
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(d) The Bond Review Board must approve an interest rate swap |
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agreement authorized under Subsection (a) before the board may |
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enter into the agreement. |
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SECTION 8. Section 162.052, Natural Resources Code, is |
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amended by adding Subsection (d) to read as follows: |
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(d) The Bond Review Board must approve an interest rate swap |
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agreement authorized under Subsection (a) before the board may |
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enter into the agreement. |
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SECTION 9. Section 164.010, Natural Resources Code, is |
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amended by adding Subsection (d) to read as follows: |
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(d) The Bond Review Board must approve an interest rate swap |
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agreement authorized under Subsection (a) before the board may |
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enter into the agreement. |
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SECTION 10. Section 1231.025, Government Code, as added by |
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this Act, applies only to a proposal for a capital project that has |
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not been authorized before the effective date of this Act. A |
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proposal that is authorized before the effective date of this Act is |
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governed by the law in effect on the date the proposal was |
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authorized, and the former law is continued in effect for that |
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purpose. |
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SECTION 11. Sections 1201.027(e), 1231.045, 1231.081(d), |
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and 2306.351(e), Government Code, and Sections 161.074(d), |
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162.052(d), and 164.010(d), Natural Resources Code, as added by |
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this Act, apply only to: |
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(1) a contract for which the solicitation of |
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applicable bids, offers, qualifications, proposals, or other |
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similar expressions of interest is published on or after September |
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1, 2007; or |
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(2) if no solicitation described by Subdivision (1) of |
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this section is published in relation to the contract, a contract |
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entered into on or after September 15, 2007. |
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SECTION 12. The Bond Review Board must comply with Section |
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1231.025, Government Code, as added by this Act, not later than |
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October 1, 2007. |
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SECTION 13. This Act takes effect September 1, 2007. |