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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, including the approval by the |
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board of certain interest rate management agreements. |
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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 Subsection (d) to read as follows: |
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(d) 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, on request, submit to the Bond |
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Review Board: |
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(1) the request for proposals to provide the services |
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not later than the date the request for 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) an executed contract entered into by an issuer for |
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services under Subsection (a). |
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SECTION 2. 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 MANAGEMENT AGREEMENTS. |
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(a) Subject to the procedures provided by Sections 1231.042 and |
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1231.043, an entity that issues a state security may not enter into |
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an interest rate management agreement related to the state security |
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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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(b) This section does not apply to an issuer that, before |
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November 1, 2006, has entered into: |
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(1) at least three interest rate management |
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agreements; or |
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(2) one or more interest rate management agreements |
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with notional amounts totaling at least $400 million. |
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SECTION 3. 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, |
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in consultation with the Legislative Budget Board, shall annually |
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prepare a study regarding the state's current debt burden by: |
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(1) analyzing the state's historical debt use and |
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financial and economic resources to determine the amount of |
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additional not self-supporting 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, at a minimum, the state's debt affordability and serve |
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as a guideline for debt authorizations and debt service |
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appropriations. The mechanism must be designed to calculate: |
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(1) the not self-supporting debt service as a |
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percentage of unrestricted 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 Committee on Finance 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 ratio for not self-supporting debt |
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service as a percentage of unrestricted revenues. |
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SECTION 4. Subsection (d), Section 1201.027 and Section |
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1231.045, Government Code, as added by 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 5. This Act takes effect September 1, 2007. |
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