84R18422 TJB-D

By: Campbell, et al. S.B. No. 310

(Goldman)

Substitute the following for S.B. No. 310: No.

A BILL TO BE ENTITLED

AN ACT

relating to procedures and requirements for the issuance of certificates of obligation.

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

SECTION 1. Section 271.047, Local Government Code, is amended by adding Subsection (d) to read as follows:

(d) The governing body of an issuer may not authorize a certificate to pay a contractual obligation to be incurred if a bond proposition to authorize the issuance of bonds for the same purpose was submitted to the voters during the preceding three years and failed to be approved except:

(1) in a case of grave public necessity to meet an unusual and unforeseen condition; or

(2) if necessary to comply with:

(A) an order of a state or federal court; or

(B) a final decision or order of a state or federal administrative body.

SECTION 2. Section 271.049, Local Government Code, is amended to read as follows:

Sec. 271.049. NOTICE OF INTENTION TO ISSUE CERTIFICATES; PETITION AND ELECTION. (a) Regardless of the sources of payment of certificates, certificates may not be issued unless the issuer publishes notice of its intention to issue the certificates. The notice must be published:

(1) once a week for two consecutive weeks in a newspaper, as defined by Subchapter C, Chapter 2051, Government Code, that is of general circulation in the area of the issuer, with the date of the first publication to be before the 45th [30th] day before the date tentatively set for the passage of the order or ordinance authorizing the issuance of the certificates; and

(2) continuously on the issuer's Internet website for at least 45 days before the date tentatively set for the passage of the order or ordinance authorizing the issuance of the certificates.

(b) The notice must state:

(1) the time and place tentatively set for the passage of the order or ordinance authorizing the issuance of the certificates;

(2) the [maximum amount and] purpose of the certificates to be authorized; [and]

(3) the manner in which the certificates will be paid for, whether by taxes, revenues, or a combination of the two;

(4) the following, stated as a total amount and as a per capita amount:

(A) the then-current principal of all outstanding debt obligations of the issuer;

(B) the then-current combined principal and interest required to pay all outstanding debt obligations of the issuer on time and in full;

(C) the principal of the certificates to be authorized; and

(D) the estimated combined principal and interest required to pay the certificates to be authorized on time and in full;

(5) the estimated rate of interest for the certificates to be authorized;

(6) the maturity date of the certificates to be authorized; and

(7) the process by which a petition may be submitted requesting an election on the issuance of the certificates, in the following form:

"Five percent of the registered voters of (name of issuer) may petition to require an election to be held authorizing the issuance of certificates of obligation by delivering a signed petition to the (insert "secretary or clerk" if the issuer is a municipality, or "county clerk" if the issuer is a county) of (name of issuer) before the date the governing body has set for the authorization of the certificates of obligation. Information about the requirements of the petition may be obtained from the (insert "secretary or clerk" if the issuer is a municipality, or "county clerk" if the issuer is a county) of (name of issuer)."[.]

(c) If before the date tentatively set for the authorization of the issuance of the certificates or if before the authorization, the municipal secretary or clerk if the issuer is a municipality, or the county clerk if the issuer is a county, receives a petition signed by at least five percent of the registered [qualified] voters of the issuer protesting the issuance of the certificates, the issuer may not authorize the issuance of the certificates unless the issuance is approved at an election ordered, held, and conducted in the manner provided for bond elections under Chapter 1251, Government Code.

(d) This section does not apply to certificates issued for the purposes described by Sections 271.056(1)-(3) [271.056(1)-(4)].

(e) An issuer shall maintain an Internet website to comply with this section.

(f) In this section, "debt obligation" means an issued public security, as defined by Section 1201.002, Government Code.

SECTION 3. The changes in law made by this Act to Section 271.049, Local Government Code, apply only to a certificate of obligation for which the first notice of intention to issue the certificate is made on or after the effective date of this Act. A certificate of obligation for which the first notice of intention to issue the certificate is made before the effective date of this Act is governed by the law in effect when the notice of intention is made, and the former law is continued in effect for that purpose.

SECTION 4. This Act takes effect September 1, 2015.