Alabama 2025 Regular Session

Alabama Senate Bill SB217 Compare Versions

Only one version of the bill is available at this time.
OldNewDifferences
11 SB217INTRODUCED
22 Page 0
33 SB217
44 W11HW99-1
55 By Senator Orr
66 RFD: County and Municipal Government
77 First Read: 04-Mar-25
88 1
99 2
1010 3
1111 4
1212 5 W11HW99-1 03/04/2025 KMS (L)evp 2025-1146
1313 Page 1
1414 First Read: 04-Mar-25
1515 SYNOPSIS:
1616 Existing law requires a county to complete a
1717 county government bond financing review form that is
1818 prepared by the Department of Examiners of Public
1919 Accounts when executing a bond financing agreement that
2020 acknowledges that the county has considered the
2121 relevant factors important to the decision of entering
2222 into bonded indebtedness. The form must be submitted to
2323 the Department of Examiners of Public Accounts and made
2424 available for public inspection.
2525 This bill would require the bond financing
2626 agreement documents to include a schedule of all of the
2727 debt obligations of the county for the time span of the
2828 maturity of the debt obligation at issue and would
2929 require the chair of the county commission and the
3030 authorized signatory for the bond underwriter to sign
3131 an acknowledgment that the total amount of debt
3232 obligations and a schedule of the total debt payments
3333 have been presented and explained to all members of the
3434 county commission prior to the sale of bonds.
3535 This bill would add to the county government
3636 bond financing review form a statement acknowledging
3737 that the county commission has received from the bond
3838 underwriter a potential debt service schedule for all
3939 county debt for the time span of the maturity of the
4040 1
4141 2
4242 3
4343 4
4444 5
4545 6
4646 7
4747 8
4848 9
4949 10
5050 11
5151 12
5252 13
5353 14
5454 15
5555 16
5656 17
5757 18
5858 19
5959 20
6060 21
6161 22
6262 23
6363 24
6464 25
6565 26
6666 27
6767 28 SB217 INTRODUCED
6868 Page 2
6969 county debt for the time span of the maturity of the
7070 debt obligation at issue and has been advised of the
7171 ability of the county to pay all of the debt
7272 obligations.
7373 This bill would require a municipality to follow
7474 the same procedures required of a county before
7575 entering into a bond financing agreement and would
7676 require the municipality to complete a government bond
7777 financing review form developed by the Department of
7878 Examiners of Public Accounts when executing a bond
7979 financing agreement acknowledging that the municipality
8080 has considered the relevant factors important to the
8181 decision of entering into bonded indebtedness.
8282 This bill would also require that the form be
8383 submitted to the Department of Examiners of Public
8484 Accounts and made available for public inspection.
8585 A BILL
8686 TO BE ENTITLED
8787 AN ACT
8888 To amend Sections 11-8A-3 and 11-8A-4, Code of Alabama
8989 1975, relating to the county government bond financing review
9090 form; to require the bond financing agreement documents to
9191 include a schedule of all of the debt obligations of the
9292 county under certain conditions; to require the chair of the
9393 county commission and the authorized signatory for the bond
9494 underwriter to sign an acknowledgement that the total amount
9595 29
9696 30
9797 31
9898 32
9999 33
100100 34
101101 35
102102 36
103103 37
104104 38
105105 39
106106 40
107107 41
108108 42
109109 43
110110 44
111111 45
112112 46
113113 47
114114 48
115115 49
116116 50
117117 51
118118 52
119119 53
120120 54
121121 55
122122 56 SB217 INTRODUCED
123123 Page 3
124124 underwriter to sign an acknowledgement that the total amount
125125 of debt obligations and a schedule of the total debt payments
126126 have been presented and explained to the county commission; to
127127 add a statement to the county government bond financing review
128128 form acknowledging that the county commission has received the
129129 debt service schedule under certain conditions; to require
130130 that a municipality would follow the same procedures required
131131 of a county before entering into a bond financing agreement
132132 and would complete a government bond financing review form
133133 developed by the Department of Examiners of Public Accounts;
134134 and to require that the form be submitted to the Department of
135135 Examiners of Public Accounts and be made available for public
136136 inspection.
137137 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
138138 Section 1. Sections 11-8A-3 and 11-8A-4 of the Code of
139139 Alabama 1975, are amended to read as follows:
140140 "ยง11-8A-3
141141 (a) In addition to any and all other documents
142142 presented for examination and execution of a bond financing
143143 agreement which, for the purposes of this chapter, takes place
144144 at the time a county commission makes an official award of the
145145 bonds, the county commission shall execute a county government
146146 bond financing review form. The standard review form shall be
147147 prepared by the Department of Examiners of Public Accounts and
148148 shall include statements to the effect that:
149149 (1) The county commission has considered whether it can
150150 satisfy its financial obligations for the life of the bonds.
151151 (2) In the case of limited obligation indebtedness, the
152152 county commission has identified the source for the debt
153153 57
154154 58
155155 59
156156 60
157157 61
158158 62
159159 63
160160 64
161161 65
162162 66
163163 67
164164 68
165165 69
166166 70
167167 71
168168 72
169169 73
170170 74
171171 75
172172 76
173173 77
174174 78
175175 79
176176 80
177177 81
178178 82
179179 83
180180 84 SB217 INTRODUCED
181181 Page 4
182182 county commission has identified the source for the debt
183183 service payments for the life of the bonds, and in the case of
184184 general obligation indebtedness, the county commission has
185185 indicated that the full faith and credit of the county has
186186 been pledged for the debt service payments for the life of the
187187 bonds.
188188 (3) The county commission has considered the period of
189189 usefulness of the improvement or property for which the bonds
190190 are to be issued in light of the duration of the term of the
191191 bonds under the bond financing agreement.
192192 (4) The county commission acknowledges that bond
193193 proceeds shall not be used for general operating expenses of
194194 the county.
195195 (5) The county commission has received from the bond
196196 underwriter, bond counsel, issuer's counsel, trustee, and any
197197 others associated with the issuance of bonds an itemized
198198 listing of their respective fees and all other costs which
199199 shall not be subject to change prior to the sale or issuance
200200 of bonds.
201201 (6) The county commission has received from the bond
202202 underwriter a clear and understandable written proposal
203203 explaining all details of the proposed bond issue, its
204204 repayment schedule, and any external factors which could
205205 affect the total cost to the county if it issues the bonds.
206206 (7) The county commission has considered the effect, if
207207 any, that the bonds will have on the county's constitutional
208208 debt limit.
209209 (8) The county commission has received from the bond
210210 underwriter information demonstrating that the estimated
211211 85
212212 86
213213 87
214214 88
215215 89
216216 90
217217 91
218218 92
219219 93
220220 94
221221 95
222222 96
223223 97
224224 98
225225 99
226226 100
227227 101
228228 102
229229 103
230230 104
231231 105
232232 106
233233 107
234234 108
235235 109
236236 110
237237 111
238238 112 SB217 INTRODUCED
239239 Page 5
240240 underwriter information demonstrating that the estimated
241241 interest rate on the bonds is reasonable and, that if
242242 information regarding similar recent issuances is available,
243243 the interest rates are comparable with other similar issuances
244244 based on current bond market conditions on the date of
245245 execution of the bond financing agreement.
246246 (9) The county commission has received from the bond
247247 underwriter a separate document of the potential debt service
248248 schedule for all county debt for the time span of the maturity
249249 of the debt obligation at issue and has been advised of the
250250 ability of the county to pay all of the debt obligations.
251251 (b) If the proceeds of the proposed bonds are to be
252252 used in whole or in part for the purpose of refinancing or
253253 refunding outstanding bonds, the county government bond
254254 financing review form shall also include statements to the
255255 effect that:
256256 (1) The county commission understands how the issuance
257257 of refunding bonds may extend the county's initial debt
258258 repayment period and the total cost paid by the county by the
259259 end of the refunding period.
260260 (2) The county commission has considered whether the
261261 refunding bonds will create net present value savings for the
262262 county, including the costs of refinancing.
263263 (c) In connection with a swap agreement, the county
264264 government bond financing review form shall include statements
265265 to the effect that:
266266 (1) The county commission has complied with paragraph
267267 a. of subdivision (2) of Section 41-1-42 (2)a.
268268 (2) The county commission has reviewed or had explained
269269 113
270270 114
271271 115
272272 116
273273 117
274274 118
275275 119
276276 120
277277 121
278278 122
279279 123
280280 124
281281 125
282282 126
283283 127
284284 128
285285 129
286286 130
287287 131
288288 132
289289 133
290290 134
291291 135
292292 136
293293 137
294294 138
295295 139
296296 140 SB217 INTRODUCED
297297 Page 6
298298 (2) The county commission has reviewed or had explained
299299 by the adviser selected as provided in Section 11-8A-5 all
300300 documentation provided pertaining to the swap agreement as
301301 required in subsection (d).
302302 (3) The county commission has designated an employee or
303303 official who will have primary responsibility for the
304304 consideration, execution, and monitoring of interest rate
305305 swaps and financial hedges entered into by the county.
306306 (4) The county commission has determined whether the
307307 county's obligations under the swap agreement constitute a
308308 general obligation indebtedness of the county and whether the
309309 source of payment is sufficient.
310310 (5) The county commission has sought and received
311311 specific information disclosing the potential risks inherent
312312 in the swap agreement including those risks commonly referred
313313 to in the derivatives industry as basis risk, tax risk,
314314 interest rate risk, counterparty risk, termination risk,
315315 market-access risk, rollover or anticipation risk, and credit
316316 risk.
317317 (d) The county government bond financing review form
318318 shall also include a statement acknowledging that all
319319 enumerated items on the review form have been considered by
320320 the county commission, and that the county commission has
321321 voted to enter into the bond financing agreement or swap
322322 agreement by an affirmative vote of a majority of the members
323323 of the county commission. The statement of acknowledgment
324324 shall be signed by the chair of the county commission or
325325 another commission member designated by the county commission
326326 and the adviser or consultant utilized by the county
327327 141
328328 142
329329 143
330330 144
331331 145
332332 146
333333 147
334334 148
335335 149
336336 150
337337 151
338338 152
339339 153
340340 154
341341 155
342342 156
343343 157
344344 158
345345 159
346346 160
347347 161
348348 162
349349 163
350350 164
351351 165
352352 166
353353 167
354354 168 SB217 INTRODUCED
355355 Page 7
356356 and the adviser or consultant utilized by the county
357357 commission pursuant to Section 11-8A-5.
358358 (e) A copy of the county government bond financing
359359 review form shall be forwarded to the Department of Examiners
360360 of Public Accounts within 10 business days of the issuance of
361361 the bonds or swap agreement. All county government bond
362362 financing review forms shall be kept on file at the department
363363 and shall be available for public inspection for a period of
364364 seven years."
365365 "ยง11-8A-4
366366 (a) In addition to the requirements of Section 11-8A-3,
367367 the bond financing agreement documents shall include a
368368 detailed itemization of the costs and fees which will be paid
369369 directly by the county commission or from bond proceeds under
370370 the bond financing agreement. This itemization shall include a
371371 statement acknowledging that the amounts of these costs and
372372 fees have been presented and explained to all members of the
373373 county commission prior to the sale of bonds. The
374374 acknowledgement statement shall be signed by the chair of the
375375 county commission or another commission member designated by
376376 the county commission and by the authorized signatory for the
377377 bond underwriter.
378378 (b) In addition to the requirements of Section 11-8A-3,
379379 the bond financing agreement documents shall include a
380380 schedule of all the debt obligations of the county for the
381381 time span of the maturity of the debt obligations at issue.
382382 This schedule shall include a statement acknowledging that the
383383 total amount of all debt obligations and a schedule of the
384384 total debt payments have been presented and explained to all
385385 169
386386 170
387387 171
388388 172
389389 173
390390 174
391391 175
392392 176
393393 177
394394 178
395395 179
396396 180
397397 181
398398 182
399399 183
400400 184
401401 185
402402 186
403403 187
404404 188
405405 189
406406 190
407407 191
408408 192
409409 193
410410 194
411411 195
412412 196 SB217 INTRODUCED
413413 Page 8
414414 total debt payments have been presented and explained to all
415415 members of the county commission prior to the sale of bonds.
416416 The acknowledgement statement shall be signed by the chair of
417417 the county commission or another commission member designated
418418 by the county commission and by the authorized signatory for
419419 the bond underwriter.
420420 (b)(c) In connection with a swap agreement, the
421421 documentation necessary to effectuate the swap agreement shall
422422 also include a statement from the authorized signatory for the
423423 bond underwriter or authorized signatory of the provider of
424424 the swap agreement to the effect that:
425425 (1) It has provided the county commission with a
426426 disclosure of the potential risks inherent in the swap
427427 agreement.
428428 (2) It has disclosed all fees associated with the swap
429429 agreement.
430430 (3) It has provided the county commission with
431431 documentation necessary to effectuate the swap agreement
432432 including master agreements, schedules, credit support
433433 annexes, confirmations, legal opinions, fairness opinions, and
434434 any other information necessary to comply with subdivisions
435435 (3) and (5) of subsection (c) of Section 11-8A-3 (c)(3) and
436436 Section 11-8A-3(c)(5) ."
437437 Section 2. For the purposes of Sections 2 through 7,
438438 the following terms shall have the following meanings:
439439 (1) BOND FINANCING AGREEMENT. An agreement or other
440440 document relating to the sale or issuance of bonds including,
441441 but not limited to, a bond purchase agreement, a loan
442442 agreement, a refinancing agreement, or documents providing for
443443 197
444444 198
445445 199
446446 200
447447 201
448448 202
449449 203
450450 204
451451 205
452452 206
453453 207
454454 208
455455 209
456456 210
457457 211
458458 212
459459 213
460460 214
461461 215
462462 216
463463 217
464464 218
465465 219
466466 220
467467 221
468468 222
469469 223
470470 224 SB217 INTRODUCED
471471 Page 9
472472 agreement, a refinancing agreement, or documents providing for
473473 bonds sold or issued on a competitive sale basis.
474474 (2) BONDS. Bonds, bond anticipation notes, warrants,
475475 warrant anticipation notes, or indebtedness issued or entered
476476 into on behalf of a municipality for a term of at least three
477477 years or more.
478478 (3) BUSINESS DAY. A day, other than a Saturday or a
479479 Sunday, on which commercial banking institutions are open for
480480 business in this state and a day on which the payment system
481481 of the Federal Reserve System is operational.
482482 (4) CAPITAL EXPENDITURE. Any cost or expense of a type
483483 that is properly chargeable to a capital account under general
484484 federal income tax principles.
485485 (5) GENERAL OBLIGATION INDEBTEDNESS. A bond financing
486486 agreement which, according to its terms, will be repaid from
487487 any funds at the disposal of the municipality.
488488 (6) GENERAL OPERATING EXPENSES. Any expense incurred by
489489 a municipality in the general operation and function of the
490490 municipality. The term includes salaries and other associated
491491 expenses, but does not include a capital expenditure or
492492 expense.
493493 (7) LIMITED OBLIGATION INDEBTEDNESS. Bonds which,
494494 according to their terms, are required to be paid solely from
495495 the proceeds of a specific tax, fee, license, charge, or other
496496 specific revenue stream.
497497 (8) NET PRESENT VALUE SAVINGS. The projected cost
498498 savings to the municipality from refinancing any bonds, by
499499 comparing the net present value of the costs of the bonds
500500 proposed for refunding, including the original costs of
501501 225
502502 226
503503 227
504504 228
505505 229
506506 230
507507 231
508508 232
509509 233
510510 234
511511 235
512512 236
513513 237
514514 238
515515 239
516516 240
517517 241
518518 242
519519 243
520520 244
521521 245
522522 246
523523 247
524524 248
525525 249
526526 250
527527 251
528528 252 SB217 INTRODUCED
529529 Page 10
530530 proposed for refunding, including the original costs of
531531 issuance and the payment of principal and interest on the
532532 bonds proposed for refunding, with the net present value of
533533 the costs of the proposed bonds, including the costs of
534534 issuance and refinancing and the payment of principal and
535535 interest on the proposed bonds.
536536 (9) SWAP AGREEMENT. A swap agreement as defined in
537537 Article 3 of Chapter 1 of Title 41, Code of Alabama 1975.
538538 Section 3. Notwithstanding any other provision of law,
539539 after October 1, 2024, no municipality may enter into any bond
540540 financing agreement or other transaction related to
541541 establishing bonded indebtedness that constitutes or creates
542542 an obligation, debt, or charge against the credit or taxing
543543 power of the municipality until and unless the municipality
544544 has satisfied the requirements of Sections 2 through 6.
545545 Section 4. (a) In addition to any and all other
546546 documents presented for examination and execution of a bond
547547 financing agreement which, for the purposes of Sections 2
548548 through 6, takes place at the time a municipality makes an
549549 official award of the bonds, the municipality shall execute a
550550 government bond financing review form. The standard review
551551 form shall be prepared by the Department of Examiners of
552552 Public Accounts and shall include statements to the effect
553553 that:
554554 (1) The municipality has considered whether it can
555555 satisfy its financial obligations for the life of the bonds.
556556 (2) In the case of limited obligation indebtedness, the
557557 municipality has identified the source for the debt service
558558 payments for the life of the bonds and, in the case of general
559559 253
560560 254
561561 255
562562 256
563563 257
564564 258
565565 259
566566 260
567567 261
568568 262
569569 263
570570 264
571571 265
572572 266
573573 267
574574 268
575575 269
576576 270
577577 271
578578 272
579579 273
580580 274
581581 275
582582 276
583583 277
584584 278
585585 279
586586 280 SB217 INTRODUCED
587587 Page 11
588588 payments for the life of the bonds and, in the case of general
589589 obligation indebtedness, the municipality has indicated that
590590 the full faith and credit of the municipality has been pledged
591591 for the debt service payments for the life of the bonds.
592592 (3) The municipality has considered the period of
593593 usefulness of the improvement or property for which the bonds
594594 are to be issued in light of the duration of the term of the
595595 bonds under the bond financing agreement.
596596 (4) The municipality acknowledges that bond proceeds
597597 shall not be used for general operating expenses of the
598598 municipality.
599599 (5) The municipality has received from the bond
600600 underwriter, bond counsel, issuer's counsel, trustee, and any
601601 others associated with the issuance of bonds an itemized
602602 listing of his or her respective fees and all other costs
603603 which shall not be subject to change prior to the sale or
604604 issuance of bonds.
605605 (6) The municipality has received from the bond
606606 underwriter a clear and understandable written proposal
607607 explaining all details of the proposed bond issue, its
608608 repayment schedule, and any external factors which could
609609 affect the total cost to the municipality if it issues the
610610 bonds.
611611 (7) The municipality has considered the effect, if any,
612612 that the bonds will have on the municipality's constitutional
613613 debt limit.
614614 (8) The municipality has received from the bond
615615 underwriter information demonstrating that the estimated
616616 interest rate on the bonds is reasonable and, that if
617617 281
618618 282
619619 283
620620 284
621621 285
622622 286
623623 287
624624 288
625625 289
626626 290
627627 291
628628 292
629629 293
630630 294
631631 295
632632 296
633633 297
634634 298
635635 299
636636 300
637637 301
638638 302
639639 303
640640 304
641641 305
642642 306
643643 307
644644 308 SB217 INTRODUCED
645645 Page 12
646646 interest rate on the bonds is reasonable and, that if
647647 information regarding similar recent issuances is available,
648648 the interest rates are comparable with other similar issuances
649649 based on current bond market conditions on the date of
650650 execution of the bond financing agreement.
651651 (9) The municipality has received from the bond
652652 underwriter a separate document of the potential debt service
653653 schedule for all municipality debt for the time span of the
654654 maturity of the debt obligation at issue and has been advised
655655 of the ability of the municipality to pay all of the debt
656656 obligations.
657657 (b) If the proceeds of the proposed bonds are to be
658658 used in whole or in part for the purpose of refinancing or
659659 refunding outstanding bonds, the government bond financing
660660 review form shall also include statements to the effect that:
661661 (1) The municipality understands how the issuance of
662662 refunding bonds may extend the municipality's initial debt
663663 repayment period and the total cost paid by the municipality
664664 by the end of the refunding period.
665665 (2) The municipality has considered whether the
666666 refunding bonds will create net present value savings for the
667667 municipality, including the costs of refinancing.
668668 (c) In connection with a swap agreement, the government
669669 bond financing review form shall include statements to the
670670 effect that:
671671 (1) The municipality has complied with Section
672672 41-1-42(2)a., Code of Alabama 1975.
673673 (2) The municipality has reviewed or had explained by
674674 the adviser selected as provided in Section 6 all
675675 309
676676 310
677677 311
678678 312
679679 313
680680 314
681681 315
682682 316
683683 317
684684 318
685685 319
686686 320
687687 321
688688 322
689689 323
690690 324
691691 325
692692 326
693693 327
694694 328
695695 329
696696 330
697697 331
698698 332
699699 333
700700 334
701701 335
702702 336 SB217 INTRODUCED
703703 Page 13
704704 the adviser selected as provided in Section 6 all
705705 documentation provided pertaining to the swap agreement as
706706 required in subsection (d).
707707 (3) The municipality has designated an employee or
708708 official who will have primary responsibility for the
709709 consideration, execution, and monitoring of interest rate
710710 swaps and financial hedges entered into by the municipality.
711711 (4) The municipality has determined whether the
712712 municipality's obligations under the swap agreement constitute
713713 a general obligation indebtedness of the municipality and
714714 whether the source of payment is sufficient.
715715 (5) The municipality has sought and received specific
716716 information disclosing the potential risks inherent in the
717717 swap agreement, including those risks commonly referred to in
718718 the derivatives industry as basis risk, tax risk, interest
719719 rate risk, counterparty risk, termination risk, market-access
720720 risk, rollover or anticipation risk, and credit risk.
721721 (d) The government bond financing review form shall
722722 also include a statement acknowledging that all enumerated
723723 items on the review form have been considered by the
724724 municipality, and that the municipality has voted to enter
725725 into the bond financing agreement or swap agreement by an
726726 affirmative vote of a majority of the members of the city
727727 council of the municipality. The statement of acknowledgment
728728 shall be signed by the chair of the city council of the
729729 municipality or another member designated by the municipality
730730 and the adviser or consultant utilized by the municipality
731731 pursuant to Section 6.
732732 (e) A copy of the government bond financing review form
733733 337
734734 338
735735 339
736736 340
737737 341
738738 342
739739 343
740740 344
741741 345
742742 346
743743 347
744744 348
745745 349
746746 350
747747 351
748748 352
749749 353
750750 354
751751 355
752752 356
753753 357
754754 358
755755 359
756756 360
757757 361
758758 362
759759 363
760760 364 SB217 INTRODUCED
761761 Page 14
762762 (e) A copy of the government bond financing review form
763763 shall be forwarded to the Department of Examiners of Public
764764 Accounts within 10 business days of the issuance of the bonds
765765 or swap agreement. All government bond financing review forms
766766 shall be kept on file at the Department of Examiners of Public
767767 Accounts and shall be available for public inspection for a
768768 period of seven years.
769769 Section 5. (a) In addition to the requirements of
770770 Section 4, the bond financing agreement documents shall
771771 include a detailed itemization of the costs and fees which
772772 will be paid directly by the municipality or from bond
773773 proceeds under the bond financing agreement. This itemization
774774 shall include a statement acknowledging that the amounts of
775775 these costs and fees have been presented and explained to all
776776 members of the city council of the municipality prior to the
777777 sale of bonds. The acknowledgement statement shall be signed
778778 by the chair of the city council or another member designated
779779 by the municipality and by the authorized signatory for the
780780 bond underwriter.
781781 (b) In addition to the requirements of Section 4, the
782782 bond financing agreement documents shall include a schedule of
783783 all of the debt obligations of the municipality for the time
784784 span of the maturity of the debt obligation at issue. This
785785 schedule shall include a statement acknowledging that the
786786 total amount of all debt obligations and a schedule of the
787787 total debt payments have been presented and explained to all
788788 members of the city council prior to the sale of bonds. The
789789 acknowledgement statement shall be signed by the chair of the
790790 city council or a member designated by the city council and by
791791 365
792792 366
793793 367
794794 368
795795 369
796796 370
797797 371
798798 372
799799 373
800800 374
801801 375
802802 376
803803 377
804804 378
805805 379
806806 380
807807 381
808808 382
809809 383
810810 384
811811 385
812812 386
813813 387
814814 388
815815 389
816816 390
817817 391
818818 392 SB217 INTRODUCED
819819 Page 15
820820 city council or a member designated by the city council and by
821821 the authorized signatory for the bond underwriter.
822822 (c) In connection with a swap agreement, the
823823 documentation necessary to effectuate the swap agreement shall
824824 also include a statement from the authorized signatory for the
825825 bond underwriter or authorized signatory of the provider of
826826 the swap agreement to the effect that:
827827 (1) It has provided the municipality with a disclosure
828828 of the potential risks inherent in the swap agreement.
829829 (2) It has disclosed all fees associated with the swap
830830 agreement.
831831 (3) It has provided the municipality with documentation
832832 necessary to effectuate the swap agreement including master
833833 agreements, schedules, credit support annexes, confirmations,
834834 legal opinions, fairness opinions, and any other information
835835 necessary to comply with Section 4(c)(3) and Section 4(c)(5).
836836 Section 6. In preparing the government bond financing
837837 review form, the municipality shall consult with and obtain
838838 advice from either an attorney for the municipality, or, at
839839 the option of the municipality, a certified public accountant
840840 regarding any and all bond or swap proposals received by the
841841 municipality. The individual or individuals utilized by the
842842 municipality for advice and consultation shall review all
843843 documents to be included at the execution of the bond
844844 financing agreement or swap agreement.
845845 Section 7. The requirements of Sections 2 through 6
846846 shall not apply with respect to any bond financing agreement
847847 or other transaction related to incurring or establishing
848848 bonded or other indebtedness that constitutes or creates an
849849 393
850850 394
851851 395
852852 396
853853 397
854854 398
855855 399
856856 400
857857 401
858858 402
859859 403
860860 404
861861 405
862862 406
863863 407
864864 408
865865 409
866866 410
867867 411
868868 412
869869 413
870870 414
871871 415
872872 416
873873 417
874874 418
875875 419
876876 420 SB217 INTRODUCED
877877 Page 16
878878 bonded or other indebtedness that constitutes or creates an
879879 obligation, debt, or charge against the credit or taxing power
880880 of a municipality, which obligation, debt, or charge is to be
881881 incurred to finance improvements to, betterments, or expansion
882882 of a gas, electric, water, sewer, or other utility system
883883 owned or controlled by the municipality or is to be payable
884884 from revenues or properties of a gas, electric, water, sewer,
885885 or other utility system pledged or otherwise contractually
886886 obligated to the payment of the obligation, debt, or charge.
887887 Section 8. This act shall become effective on October
888888 1, 2024.
889889 421
890890 422
891891 423
892892 424
893893 425
894894 426
895895 427
896896 428
897897 429
898898 430