|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
| |
|
|
relating to the issuance of obligations by political subdivisions |
|
|
to pay unfunded liabilities for certain retirement benefits of |
|
|
officers and employees of the political subdivisions. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subtitle H, Title 9, Government Code, is amended |
|
|
by adding Chapter 1436 to read as follows: |
|
|
CHAPTER 1436. OBLIGATIONS OF POLITICAL SUBDIVISIONS FOR CERTAIN |
|
|
RETIREMENT BENEFITS |
|
|
Sec. 1436.001. DEFINITIONS. In this chapter: |
|
|
(1) "Obligation" includes a bond, certificate, note, |
|
|
or book entry obligation. |
|
|
(2) "Unfunded liability" means an unfunded actuarial |
|
|
accrued liability of a political subdivision for a nonpension |
|
|
retirement benefit. |
|
|
Sec. 1436.002. DEFINITION OF NONPENSION RETIREMENT |
|
|
BENEFIT. In this chapter, "nonpension retirement benefit" means a |
|
|
retirement benefit, including a health care benefit plan, for |
|
|
retired employees or officers of a political subdivision, other |
|
|
than: |
|
|
(1) a continuing, organized program or plan of service |
|
|
retirement, disability retirement, or death benefits for officers |
|
|
or employees of a political subdivision; and |
|
|
(2) a plan qualified under Section 401(a), Internal |
|
|
Revenue Code of 1986. |
|
|
Sec. 1436.003. NONPENSION RETIREMENT BENEFIT OBLIGATIONS |
|
|
AUTHORIZED. (a) A political subdivision may issue obligations to |
|
|
fund all or any part of an unfunded liability. |
|
|
(b) Before authorizing issuance and delivery of an |
|
|
obligation under this section, the political subdivision's |
|
|
governing body must enter into a written agreement with an entity |
|
|
that must have: |
|
|
(1) fiduciary responsibility for: |
|
|
(A) assets that fund the political subdivision's |
|
|
nonpension retirement benefits; and |
|
|
(B) a fund created to receive the net proceeds of |
|
|
the obligations to be issued under this section; and |
|
|
(2) the duty to oversee the investment and expenditure |
|
|
of the assets of the fund created to receive the net proceeds of the |
|
|
obligations to be issued under this section. |
|
|
(c) The written agreement must state the amount of the |
|
|
unfunded liability and the date or dates on which the fund created |
|
|
to receive the net proceeds of the obligations to be issued under |
|
|
this section will accept the net proceeds of the obligations in |
|
|
payment of all or a portion of the unfunded liability. |
|
|
Sec. 1436.004. PROCEEDS OF OBLIGATIONS ISSUED. The |
|
|
political subdivision shall deposit the net proceeds of obligations |
|
|
issued under Section 1436.003 to the credit of the fund created to |
|
|
receive the net proceeds of the obligations. |
|
|
Sec. 1436.005. PAYMENT OF OBLIGATIONS. An obligation |
|
|
issued under Section 1436.003 may be made payable by the political |
|
|
subdivision from: |
|
|
(1) the fund from which compensation is paid to its |
|
|
officers and employees; |
|
|
(2) its general fund; or |
|
|
(3) taxes, revenues, both taxes and revenues, or any |
|
|
other source or combination of sources of money that the political |
|
|
subdivision may use under state law to secure or pay any kind of |
|
|
bond or obligation. |
|
|
Sec. 1436.006. OBLIGATION AS REFINANCING. An obligation |
|
|
issued under Section 1436.003 is a complete or partial refinancing |
|
|
of a commitment of the political subdivision to fund its unfunded |
|
|
liability. |
|
|
Sec. 1436.007. SALE OF OBLIGATIONS; MATURITY. Obligations |
|
|
issued under Section 1436.003 may be sold at private or public sale |
|
|
and must mature not later than the 30th anniversary of the date of |
|
|
issuance. |
|
|
Sec. 1436.008. ADDITIONAL AUTHORITY; CREDIT AGREEMENTS. |
|
|
(a) In this section, "credit agreement" and "obligation" have the |
|
|
meanings assigned by Section 1371.001. |
|
|
(b) The governing body of a political subdivision that |
|
|
issues obligations under Section 1436.003 may exercise any of the |
|
|
rights or powers of the governing body of an issuer under Chapter |
|
|
1371 and may enter into a credit agreement under that chapter. An |
|
|
obligation issued under Section 1436.003 is an obligation under |
|
|
Chapter 1371 but is not required to be rated as required by that |
|
|
chapter. |
|
|
Sec. 1436.009. CHAPTER CONTROLLING. This chapter prevails |
|
|
over any conflict between this chapter and: |
|
|
(1) another law respecting the issuance of obligations |
|
|
of a political subdivision; or |
|
|
(2) a municipal home-rule charter. |
|
|
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. |
|
|
|
|
|
* * * * * |