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2 | 2 | | Page 0 |
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3 | 3 | | SB217 |
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4 | 4 | | W11HW99-1 |
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5 | 5 | | By Senator Orr |
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6 | 6 | | RFD: County and Municipal Government |
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7 | 7 | | First Read: 04-Mar-25 |
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12 | 12 | | 5 W11HW99-1 03/04/2025 KMS (L)evp 2025-1146 |
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13 | 13 | | Page 1 |
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14 | 14 | | First Read: 04-Mar-25 |
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15 | 15 | | SYNOPSIS: |
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16 | 16 | | Existing law requires a county to complete a |
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17 | 17 | | county government bond financing review form that is |
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18 | 18 | | prepared by the Department of Examiners of Public |
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19 | 19 | | Accounts when executing a bond financing agreement that |
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20 | 20 | | acknowledges that the county has considered the |
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21 | 21 | | relevant factors important to the decision of entering |
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22 | 22 | | into bonded indebtedness. The form must be submitted to |
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23 | 23 | | the Department of Examiners of Public Accounts and made |
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24 | 24 | | available for public inspection. |
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25 | 25 | | This bill would require the bond financing |
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26 | 26 | | agreement documents to include a schedule of all of the |
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27 | 27 | | debt obligations of the county for the time span of the |
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28 | 28 | | maturity of the debt obligation at issue and would |
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29 | 29 | | require the chair of the county commission and the |
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30 | 30 | | authorized signatory for the bond underwriter to sign |
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31 | 31 | | an acknowledgment that the total amount of debt |
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32 | 32 | | obligations and a schedule of the total debt payments |
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33 | 33 | | have been presented and explained to all members of the |
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34 | 34 | | county commission prior to the sale of bonds. |
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35 | 35 | | This bill would add to the county government |
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36 | 36 | | bond financing review form a statement acknowledging |
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37 | 37 | | that the county commission has received from the bond |
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38 | 38 | | underwriter a potential debt service schedule for all |
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39 | 39 | | county debt for the time span of the maturity of the |
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67 | 67 | | 28 SB217 INTRODUCED |
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68 | 68 | | Page 2 |
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69 | 69 | | county debt for the time span of the maturity of the |
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70 | 70 | | debt obligation at issue and has been advised of the |
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71 | 71 | | ability of the county to pay all of the debt |
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72 | 72 | | obligations. |
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73 | 73 | | This bill would require a municipality to follow |
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74 | 74 | | the same procedures required of a county before |
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75 | 75 | | entering into a bond financing agreement and would |
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76 | 76 | | require the municipality to complete a government bond |
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77 | 77 | | financing review form developed by the Department of |
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78 | 78 | | Examiners of Public Accounts when executing a bond |
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79 | 79 | | financing agreement acknowledging that the municipality |
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80 | 80 | | has considered the relevant factors important to the |
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81 | 81 | | decision of entering into bonded indebtedness. |
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82 | 82 | | This bill would also require that the form be |
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83 | 83 | | submitted to the Department of Examiners of Public |
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84 | 84 | | Accounts and made available for public inspection. |
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85 | 85 | | A BILL |
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86 | 86 | | TO BE ENTITLED |
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87 | 87 | | AN ACT |
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88 | 88 | | To amend Sections 11-8A-3 and 11-8A-4, Code of Alabama |
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89 | 89 | | 1975, relating to the county government bond financing review |
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90 | 90 | | form; to require the bond financing agreement documents to |
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91 | 91 | | include a schedule of all of the debt obligations of the |
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92 | 92 | | county under certain conditions; to require the chair of the |
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93 | 93 | | county commission and the authorized signatory for the bond |
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94 | 94 | | underwriter to sign an acknowledgement that the total amount |
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123 | 123 | | Page 3 |
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124 | 124 | | underwriter to sign an acknowledgement that the total amount |
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125 | 125 | | of debt obligations and a schedule of the total debt payments |
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126 | 126 | | have been presented and explained to the county commission; to |
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127 | 127 | | add a statement to the county government bond financing review |
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128 | 128 | | form acknowledging that the county commission has received the |
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129 | 129 | | debt service schedule under certain conditions; to require |
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130 | 130 | | that a municipality would follow the same procedures required |
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131 | 131 | | of a county before entering into a bond financing agreement |
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132 | 132 | | and would complete a government bond financing review form |
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133 | 133 | | developed by the Department of Examiners of Public Accounts; |
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134 | 134 | | and to require that the form be submitted to the Department of |
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135 | 135 | | Examiners of Public Accounts and be made available for public |
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136 | 136 | | inspection. |
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137 | 137 | | BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: |
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138 | 138 | | Section 1. Sections 11-8A-3 and 11-8A-4 of the Code of |
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139 | 139 | | Alabama 1975, are amended to read as follows: |
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140 | 140 | | "ยง11-8A-3 |
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141 | 141 | | (a) In addition to any and all other documents |
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142 | 142 | | presented for examination and execution of a bond financing |
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143 | 143 | | agreement which, for the purposes of this chapter, takes place |
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144 | 144 | | at the time a county commission makes an official award of the |
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145 | 145 | | bonds, the county commission shall execute a county government |
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146 | 146 | | bond financing review form. The standard review form shall be |
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147 | 147 | | prepared by the Department of Examiners of Public Accounts and |
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148 | 148 | | shall include statements to the effect that: |
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149 | 149 | | (1) The county commission has considered whether it can |
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150 | 150 | | satisfy its financial obligations for the life of the bonds. |
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151 | 151 | | (2) In the case of limited obligation indebtedness, the |
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152 | 152 | | county commission has identified the source for the debt |
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182 | 182 | | county commission has identified the source for the debt |
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183 | 183 | | service payments for the life of the bonds, and in the case of |
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184 | 184 | | general obligation indebtedness, the county commission has |
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185 | 185 | | indicated that the full faith and credit of the county has |
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186 | 186 | | been pledged for the debt service payments for the life of the |
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187 | 187 | | bonds. |
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188 | 188 | | (3) The county commission has considered the period of |
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189 | 189 | | usefulness of the improvement or property for which the bonds |
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190 | 190 | | are to be issued in light of the duration of the term of the |
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191 | 191 | | bonds under the bond financing agreement. |
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192 | 192 | | (4) The county commission acknowledges that bond |
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193 | 193 | | proceeds shall not be used for general operating expenses of |
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194 | 194 | | the county. |
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195 | 195 | | (5) The county commission has received from the bond |
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196 | 196 | | underwriter, bond counsel, issuer's counsel, trustee, and any |
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197 | 197 | | others associated with the issuance of bonds an itemized |
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198 | 198 | | listing of their respective fees and all other costs which |
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199 | 199 | | shall not be subject to change prior to the sale or issuance |
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200 | 200 | | of bonds. |
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201 | 201 | | (6) The county commission has received from the bond |
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202 | 202 | | underwriter a clear and understandable written proposal |
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203 | 203 | | explaining all details of the proposed bond issue, its |
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204 | 204 | | repayment schedule, and any external factors which could |
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205 | 205 | | affect the total cost to the county if it issues the bonds. |
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206 | 206 | | (7) The county commission has considered the effect, if |
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207 | 207 | | any, that the bonds will have on the county's constitutional |
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208 | 208 | | debt limit. |
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209 | 209 | | (8) The county commission has received from the bond |
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210 | 210 | | underwriter information demonstrating that the estimated |
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240 | 240 | | underwriter information demonstrating that the estimated |
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241 | 241 | | interest rate on the bonds is reasonable and, that if |
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242 | 242 | | information regarding similar recent issuances is available, |
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243 | 243 | | the interest rates are comparable with other similar issuances |
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244 | 244 | | based on current bond market conditions on the date of |
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245 | 245 | | execution of the bond financing agreement. |
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246 | 246 | | (9) The county commission has received from the bond |
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247 | 247 | | underwriter a separate document of the potential debt service |
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248 | 248 | | schedule for all county debt for the time span of the maturity |
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249 | 249 | | of the debt obligation at issue and has been advised of the |
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250 | 250 | | ability of the county to pay all of the debt obligations. |
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251 | 251 | | (b) If the proceeds of the proposed bonds are to be |
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252 | 252 | | used in whole or in part for the purpose of refinancing or |
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253 | 253 | | refunding outstanding bonds, the county government bond |
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254 | 254 | | financing review form shall also include statements to the |
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255 | 255 | | effect that: |
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256 | 256 | | (1) The county commission understands how the issuance |
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257 | 257 | | of refunding bonds may extend the county's initial debt |
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258 | 258 | | repayment period and the total cost paid by the county by the |
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259 | 259 | | end of the refunding period. |
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260 | 260 | | (2) The county commission has considered whether the |
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261 | 261 | | refunding bonds will create net present value savings for the |
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262 | 262 | | county, including the costs of refinancing. |
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263 | 263 | | (c) In connection with a swap agreement, the county |
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264 | 264 | | government bond financing review form shall include statements |
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265 | 265 | | to the effect that: |
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266 | 266 | | (1) The county commission has complied with paragraph |
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267 | 267 | | a. of subdivision (2) of Section 41-1-42 (2)a. |
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268 | 268 | | (2) The county commission has reviewed or had explained |
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298 | 298 | | (2) The county commission has reviewed or had explained |
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299 | 299 | | by the adviser selected as provided in Section 11-8A-5 all |
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300 | 300 | | documentation provided pertaining to the swap agreement as |
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301 | 301 | | required in subsection (d). |
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302 | 302 | | (3) The county commission has designated an employee or |
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303 | 303 | | official who will have primary responsibility for the |
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304 | 304 | | consideration, execution, and monitoring of interest rate |
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305 | 305 | | swaps and financial hedges entered into by the county. |
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306 | 306 | | (4) The county commission has determined whether the |
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307 | 307 | | county's obligations under the swap agreement constitute a |
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308 | 308 | | general obligation indebtedness of the county and whether the |
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309 | 309 | | source of payment is sufficient. |
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310 | 310 | | (5) The county commission has sought and received |
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311 | 311 | | specific information disclosing the potential risks inherent |
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312 | 312 | | in the swap agreement including those risks commonly referred |
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313 | 313 | | to in the derivatives industry as basis risk, tax risk, |
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314 | 314 | | interest rate risk, counterparty risk, termination risk, |
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315 | 315 | | market-access risk, rollover or anticipation risk, and credit |
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316 | 316 | | risk. |
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317 | 317 | | (d) The county government bond financing review form |
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318 | 318 | | shall also include a statement acknowledging that all |
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319 | 319 | | enumerated items on the review form have been considered by |
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320 | 320 | | the county commission, and that the county commission has |
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321 | 321 | | voted to enter into the bond financing agreement or swap |
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322 | 322 | | agreement by an affirmative vote of a majority of the members |
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323 | 323 | | of the county commission. The statement of acknowledgment |
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324 | 324 | | shall be signed by the chair of the county commission or |
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325 | 325 | | another commission member designated by the county commission |
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326 | 326 | | and the adviser or consultant utilized by the county |
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356 | 356 | | and the adviser or consultant utilized by the county |
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357 | 357 | | commission pursuant to Section 11-8A-5. |
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358 | 358 | | (e) A copy of the county government bond financing |
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359 | 359 | | review form shall be forwarded to the Department of Examiners |
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360 | 360 | | of Public Accounts within 10 business days of the issuance of |
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361 | 361 | | the bonds or swap agreement. All county government bond |
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362 | 362 | | financing review forms shall be kept on file at the department |
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363 | 363 | | and shall be available for public inspection for a period of |
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364 | 364 | | seven years." |
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365 | 365 | | "ยง11-8A-4 |
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366 | 366 | | (a) In addition to the requirements of Section 11-8A-3, |
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367 | 367 | | the bond financing agreement documents shall include a |
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368 | 368 | | detailed itemization of the costs and fees which will be paid |
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369 | 369 | | directly by the county commission or from bond proceeds under |
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370 | 370 | | the bond financing agreement. This itemization shall include a |
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371 | 371 | | statement acknowledging that the amounts of these costs and |
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372 | 372 | | fees have been presented and explained to all members of the |
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373 | 373 | | county commission prior to the sale of bonds. The |
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374 | 374 | | acknowledgement statement shall be signed by the chair of the |
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375 | 375 | | county commission or another commission member designated by |
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376 | 376 | | the county commission and by the authorized signatory for the |
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377 | 377 | | bond underwriter. |
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378 | 378 | | (b) In addition to the requirements of Section 11-8A-3, |
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379 | 379 | | the bond financing agreement documents shall include a |
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380 | 380 | | schedule of all the debt obligations of the county for the |
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381 | 381 | | time span of the maturity of the debt obligations at issue. |
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382 | 382 | | This schedule shall include a statement acknowledging that the |
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383 | 383 | | total amount of all debt obligations and a schedule of the |
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384 | 384 | | total debt payments have been presented and explained to all |
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414 | 414 | | total debt payments have been presented and explained to all |
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415 | 415 | | members of the county commission prior to the sale of bonds. |
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416 | 416 | | The acknowledgement statement shall be signed by the chair of |
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417 | 417 | | the county commission or another commission member designated |
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418 | 418 | | by the county commission and by the authorized signatory for |
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419 | 419 | | the bond underwriter. |
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420 | 420 | | (b)(c) In connection with a swap agreement, the |
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421 | 421 | | documentation necessary to effectuate the swap agreement shall |
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422 | 422 | | also include a statement from the authorized signatory for the |
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423 | 423 | | bond underwriter or authorized signatory of the provider of |
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424 | 424 | | the swap agreement to the effect that: |
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425 | 425 | | (1) It has provided the county commission with a |
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426 | 426 | | disclosure of the potential risks inherent in the swap |
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427 | 427 | | agreement. |
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428 | 428 | | (2) It has disclosed all fees associated with the swap |
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429 | 429 | | agreement. |
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430 | 430 | | (3) It has provided the county commission with |
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431 | 431 | | documentation necessary to effectuate the swap agreement |
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432 | 432 | | including master agreements, schedules, credit support |
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433 | 433 | | annexes, confirmations, legal opinions, fairness opinions, and |
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434 | 434 | | any other information necessary to comply with subdivisions |
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435 | 435 | | (3) and (5) of subsection (c) of Section 11-8A-3 (c)(3) and |
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436 | 436 | | Section 11-8A-3(c)(5) ." |
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437 | 437 | | Section 2. For the purposes of Sections 2 through 7, |
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438 | 438 | | the following terms shall have the following meanings: |
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439 | 439 | | (1) BOND FINANCING AGREEMENT. An agreement or other |
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440 | 440 | | document relating to the sale or issuance of bonds including, |
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441 | 441 | | but not limited to, a bond purchase agreement, a loan |
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442 | 442 | | agreement, a refinancing agreement, or documents providing for |
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472 | 472 | | agreement, a refinancing agreement, or documents providing for |
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473 | 473 | | bonds sold or issued on a competitive sale basis. |
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474 | 474 | | (2) BONDS. Bonds, bond anticipation notes, warrants, |
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475 | 475 | | warrant anticipation notes, or indebtedness issued or entered |
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476 | 476 | | into on behalf of a municipality for a term of at least three |
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477 | 477 | | years or more. |
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478 | 478 | | (3) BUSINESS DAY. A day, other than a Saturday or a |
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479 | 479 | | Sunday, on which commercial banking institutions are open for |
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480 | 480 | | business in this state and a day on which the payment system |
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481 | 481 | | of the Federal Reserve System is operational. |
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482 | 482 | | (4) CAPITAL EXPENDITURE. Any cost or expense of a type |
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483 | 483 | | that is properly chargeable to a capital account under general |
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484 | 484 | | federal income tax principles. |
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485 | 485 | | (5) GENERAL OBLIGATION INDEBTEDNESS. A bond financing |
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486 | 486 | | agreement which, according to its terms, will be repaid from |
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487 | 487 | | any funds at the disposal of the municipality. |
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488 | 488 | | (6) GENERAL OPERATING EXPENSES. Any expense incurred by |
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489 | 489 | | a municipality in the general operation and function of the |
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490 | 490 | | municipality. The term includes salaries and other associated |
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491 | 491 | | expenses, but does not include a capital expenditure or |
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492 | 492 | | expense. |
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493 | 493 | | (7) LIMITED OBLIGATION INDEBTEDNESS. Bonds which, |
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494 | 494 | | according to their terms, are required to be paid solely from |
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495 | 495 | | the proceeds of a specific tax, fee, license, charge, or other |
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496 | 496 | | specific revenue stream. |
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497 | 497 | | (8) NET PRESENT VALUE SAVINGS. The projected cost |
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498 | 498 | | savings to the municipality from refinancing any bonds, by |
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499 | 499 | | comparing the net present value of the costs of the bonds |
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500 | 500 | | proposed for refunding, including the original costs of |
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528 | 528 | | 252 SB217 INTRODUCED |
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529 | 529 | | Page 10 |
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530 | 530 | | proposed for refunding, including the original costs of |
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531 | 531 | | issuance and the payment of principal and interest on the |
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532 | 532 | | bonds proposed for refunding, with the net present value of |
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533 | 533 | | the costs of the proposed bonds, including the costs of |
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534 | 534 | | issuance and refinancing and the payment of principal and |
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535 | 535 | | interest on the proposed bonds. |
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536 | 536 | | (9) SWAP AGREEMENT. A swap agreement as defined in |
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537 | 537 | | Article 3 of Chapter 1 of Title 41, Code of Alabama 1975. |
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538 | 538 | | Section 3. Notwithstanding any other provision of law, |
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539 | 539 | | after October 1, 2024, no municipality may enter into any bond |
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540 | 540 | | financing agreement or other transaction related to |
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541 | 541 | | establishing bonded indebtedness that constitutes or creates |
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542 | 542 | | an obligation, debt, or charge against the credit or taxing |
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543 | 543 | | power of the municipality until and unless the municipality |
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544 | 544 | | has satisfied the requirements of Sections 2 through 6. |
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545 | 545 | | Section 4. (a) In addition to any and all other |
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546 | 546 | | documents presented for examination and execution of a bond |
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547 | 547 | | financing agreement which, for the purposes of Sections 2 |
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548 | 548 | | through 6, takes place at the time a municipality makes an |
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549 | 549 | | official award of the bonds, the municipality shall execute a |
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550 | 550 | | government bond financing review form. The standard review |
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551 | 551 | | form shall be prepared by the Department of Examiners of |
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552 | 552 | | Public Accounts and shall include statements to the effect |
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553 | 553 | | that: |
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554 | 554 | | (1) The municipality has considered whether it can |
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555 | 555 | | satisfy its financial obligations for the life of the bonds. |
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556 | 556 | | (2) In the case of limited obligation indebtedness, the |
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557 | 557 | | municipality has identified the source for the debt service |
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558 | 558 | | payments for the life of the bonds and, in the case of general |
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559 | 559 | | 253 |
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586 | 586 | | 280 SB217 INTRODUCED |
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587 | 587 | | Page 11 |
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588 | 588 | | payments for the life of the bonds and, in the case of general |
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589 | 589 | | obligation indebtedness, the municipality has indicated that |
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590 | 590 | | the full faith and credit of the municipality has been pledged |
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591 | 591 | | for the debt service payments for the life of the bonds. |
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592 | 592 | | (3) The municipality has considered the period of |
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593 | 593 | | usefulness of the improvement or property for which the bonds |
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594 | 594 | | are to be issued in light of the duration of the term of the |
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595 | 595 | | bonds under the bond financing agreement. |
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596 | 596 | | (4) The municipality acknowledges that bond proceeds |
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597 | 597 | | shall not be used for general operating expenses of the |
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598 | 598 | | municipality. |
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599 | 599 | | (5) The municipality has received from the bond |
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600 | 600 | | underwriter, bond counsel, issuer's counsel, trustee, and any |
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601 | 601 | | others associated with the issuance of bonds an itemized |
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602 | 602 | | listing of his or her respective fees and all other costs |
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603 | 603 | | which shall not be subject to change prior to the sale or |
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604 | 604 | | issuance of bonds. |
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605 | 605 | | (6) The municipality has received from the bond |
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606 | 606 | | underwriter a clear and understandable written proposal |
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607 | 607 | | explaining all details of the proposed bond issue, its |
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608 | 608 | | repayment schedule, and any external factors which could |
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609 | 609 | | affect the total cost to the municipality if it issues the |
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610 | 610 | | bonds. |
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611 | 611 | | (7) The municipality has considered the effect, if any, |
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612 | 612 | | that the bonds will have on the municipality's constitutional |
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613 | 613 | | debt limit. |
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614 | 614 | | (8) The municipality has received from the bond |
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615 | 615 | | underwriter information demonstrating that the estimated |
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616 | 616 | | interest rate on the bonds is reasonable and, that if |
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617 | 617 | | 281 |
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643 | 643 | | 307 |
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644 | 644 | | 308 SB217 INTRODUCED |
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645 | 645 | | Page 12 |
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646 | 646 | | interest rate on the bonds is reasonable and, that if |
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647 | 647 | | information regarding similar recent issuances is available, |
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648 | 648 | | the interest rates are comparable with other similar issuances |
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649 | 649 | | based on current bond market conditions on the date of |
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650 | 650 | | execution of the bond financing agreement. |
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651 | 651 | | (9) The municipality has received from the bond |
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652 | 652 | | underwriter a separate document of the potential debt service |
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653 | 653 | | schedule for all municipality debt for the time span of the |
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654 | 654 | | maturity of the debt obligation at issue and has been advised |
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655 | 655 | | of the ability of the municipality to pay all of the debt |
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656 | 656 | | obligations. |
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657 | 657 | | (b) If the proceeds of the proposed bonds are to be |
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658 | 658 | | used in whole or in part for the purpose of refinancing or |
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659 | 659 | | refunding outstanding bonds, the government bond financing |
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660 | 660 | | review form shall also include statements to the effect that: |
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661 | 661 | | (1) The municipality understands how the issuance of |
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662 | 662 | | refunding bonds may extend the municipality's initial debt |
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663 | 663 | | repayment period and the total cost paid by the municipality |
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664 | 664 | | by the end of the refunding period. |
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665 | 665 | | (2) The municipality has considered whether the |
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666 | 666 | | refunding bonds will create net present value savings for the |
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667 | 667 | | municipality, including the costs of refinancing. |
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668 | 668 | | (c) In connection with a swap agreement, the government |
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669 | 669 | | bond financing review form shall include statements to the |
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670 | 670 | | effect that: |
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671 | 671 | | (1) The municipality has complied with Section |
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672 | 672 | | 41-1-42(2)a., Code of Alabama 1975. |
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673 | 673 | | (2) The municipality has reviewed or had explained by |
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674 | 674 | | the adviser selected as provided in Section 6 all |
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675 | 675 | | 309 |
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701 | 701 | | 335 |
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702 | 702 | | 336 SB217 INTRODUCED |
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703 | 703 | | Page 13 |
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704 | 704 | | the adviser selected as provided in Section 6 all |
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705 | 705 | | documentation provided pertaining to the swap agreement as |
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706 | 706 | | required in subsection (d). |
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707 | 707 | | (3) The municipality has designated an employee or |
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708 | 708 | | official who will have primary responsibility for the |
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709 | 709 | | consideration, execution, and monitoring of interest rate |
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710 | 710 | | swaps and financial hedges entered into by the municipality. |
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711 | 711 | | (4) The municipality has determined whether the |
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712 | 712 | | municipality's obligations under the swap agreement constitute |
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713 | 713 | | a general obligation indebtedness of the municipality and |
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714 | 714 | | whether the source of payment is sufficient. |
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715 | 715 | | (5) The municipality has sought and received specific |
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716 | 716 | | information disclosing the potential risks inherent in the |
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717 | 717 | | swap agreement, including those risks commonly referred to in |
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718 | 718 | | the derivatives industry as basis risk, tax risk, interest |
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719 | 719 | | rate risk, counterparty risk, termination risk, market-access |
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720 | 720 | | risk, rollover or anticipation risk, and credit risk. |
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721 | 721 | | (d) The government bond financing review form shall |
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722 | 722 | | also include a statement acknowledging that all enumerated |
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723 | 723 | | items on the review form have been considered by the |
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724 | 724 | | municipality, and that the municipality has voted to enter |
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725 | 725 | | into the bond financing agreement or swap agreement by an |
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726 | 726 | | affirmative vote of a majority of the members of the city |
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727 | 727 | | council of the municipality. The statement of acknowledgment |
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728 | 728 | | shall be signed by the chair of the city council of the |
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729 | 729 | | municipality or another member designated by the municipality |
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730 | 730 | | and the adviser or consultant utilized by the municipality |
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731 | 731 | | pursuant to Section 6. |
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732 | 732 | | (e) A copy of the government bond financing review form |
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733 | 733 | | 337 |
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734 | 734 | | 338 |
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759 | 759 | | 363 |
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760 | 760 | | 364 SB217 INTRODUCED |
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761 | 761 | | Page 14 |
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762 | 762 | | (e) A copy of the government bond financing review form |
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763 | 763 | | shall be forwarded to the Department of Examiners of Public |
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764 | 764 | | Accounts within 10 business days of the issuance of the bonds |
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765 | 765 | | or swap agreement. All government bond financing review forms |
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766 | 766 | | shall be kept on file at the Department of Examiners of Public |
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767 | 767 | | Accounts and shall be available for public inspection for a |
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768 | 768 | | period of seven years. |
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769 | 769 | | Section 5. (a) In addition to the requirements of |
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770 | 770 | | Section 4, the bond financing agreement documents shall |
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771 | 771 | | include a detailed itemization of the costs and fees which |
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772 | 772 | | will be paid directly by the municipality or from bond |
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773 | 773 | | proceeds under the bond financing agreement. This itemization |
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774 | 774 | | shall include a statement acknowledging that the amounts of |
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775 | 775 | | these costs and fees have been presented and explained to all |
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776 | 776 | | members of the city council of the municipality prior to the |
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777 | 777 | | sale of bonds. The acknowledgement statement shall be signed |
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778 | 778 | | by the chair of the city council or another member designated |
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779 | 779 | | by the municipality and by the authorized signatory for the |
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780 | 780 | | bond underwriter. |
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781 | 781 | | (b) In addition to the requirements of Section 4, the |
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782 | 782 | | bond financing agreement documents shall include a schedule of |
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783 | 783 | | all of the debt obligations of the municipality for the time |
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784 | 784 | | span of the maturity of the debt obligation at issue. This |
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785 | 785 | | schedule shall include a statement acknowledging that the |
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786 | 786 | | total amount of all debt obligations and a schedule of the |
---|
787 | 787 | | total debt payments have been presented and explained to all |
---|
788 | 788 | | members of the city council prior to the sale of bonds. The |
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789 | 789 | | acknowledgement statement shall be signed by the chair of the |
---|
790 | 790 | | city council or a member designated by the city council and by |
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791 | 791 | | 365 |
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792 | 792 | | 366 |
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793 | 793 | | 367 |
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813 | 813 | | 387 |
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816 | 816 | | 390 |
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817 | 817 | | 391 |
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818 | 818 | | 392 SB217 INTRODUCED |
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819 | 819 | | Page 15 |
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820 | 820 | | city council or a member designated by the city council and by |
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821 | 821 | | the authorized signatory for the bond underwriter. |
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822 | 822 | | (c) In connection with a swap agreement, the |
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823 | 823 | | documentation necessary to effectuate the swap agreement shall |
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824 | 824 | | also include a statement from the authorized signatory for the |
---|
825 | 825 | | bond underwriter or authorized signatory of the provider of |
---|
826 | 826 | | the swap agreement to the effect that: |
---|
827 | 827 | | (1) It has provided the municipality with a disclosure |
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828 | 828 | | of the potential risks inherent in the swap agreement. |
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829 | 829 | | (2) It has disclosed all fees associated with the swap |
---|
830 | 830 | | agreement. |
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831 | 831 | | (3) It has provided the municipality with documentation |
---|
832 | 832 | | necessary to effectuate the swap agreement including master |
---|
833 | 833 | | agreements, schedules, credit support annexes, confirmations, |
---|
834 | 834 | | legal opinions, fairness opinions, and any other information |
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835 | 835 | | necessary to comply with Section 4(c)(3) and Section 4(c)(5). |
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836 | 836 | | Section 6. In preparing the government bond financing |
---|
837 | 837 | | review form, the municipality shall consult with and obtain |
---|
838 | 838 | | advice from either an attorney for the municipality, or, at |
---|
839 | 839 | | the option of the municipality, a certified public accountant |
---|
840 | 840 | | regarding any and all bond or swap proposals received by the |
---|
841 | 841 | | municipality. The individual or individuals utilized by the |
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842 | 842 | | municipality for advice and consultation shall review all |
---|
843 | 843 | | documents to be included at the execution of the bond |
---|
844 | 844 | | financing agreement or swap agreement. |
---|
845 | 845 | | Section 7. The requirements of Sections 2 through 6 |
---|
846 | 846 | | shall not apply with respect to any bond financing agreement |
---|
847 | 847 | | or other transaction related to incurring or establishing |
---|
848 | 848 | | bonded or other indebtedness that constitutes or creates an |
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849 | 849 | | 393 |
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875 | 875 | | 419 |
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876 | 876 | | 420 SB217 INTRODUCED |
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877 | 877 | | Page 16 |
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878 | 878 | | bonded or other indebtedness that constitutes or creates an |
---|
879 | 879 | | obligation, debt, or charge against the credit or taxing power |
---|
880 | 880 | | of a municipality, which obligation, debt, or charge is to be |
---|
881 | 881 | | incurred to finance improvements to, betterments, or expansion |
---|
882 | 882 | | of a gas, electric, water, sewer, or other utility system |
---|
883 | 883 | | owned or controlled by the municipality or is to be payable |
---|
884 | 884 | | from revenues or properties of a gas, electric, water, sewer, |
---|
885 | 885 | | or other utility system pledged or otherwise contractually |
---|
886 | 886 | | obligated to the payment of the obligation, debt, or charge. |
---|
887 | 887 | | Section 8. This act shall become effective on October |
---|
888 | 888 | | 1, 2024. |
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889 | 889 | | 421 |
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890 | 890 | | 422 |
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891 | 891 | | 423 |
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892 | 892 | | 424 |
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893 | 893 | | 425 |
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894 | 894 | | 426 |
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898 | 898 | | 430 |
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