| 1 | 1 | | By: West S.B. No. 2144 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to the manner of sale of bonds issued by municipal utility |
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| 7 | 7 | | districts. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Section 49.183, Water Code, is amended to read as |
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| 10 | 10 | | follows: |
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| 11 | 11 | | Sec. 49.183. BOND SALES. (a) Except for refunding bonds, |
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| 12 | 12 | | bonds issued by a municipal utility district, or bonds sold to a |
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| 13 | 13 | | state or federal agency or to the North American Development Bank, |
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| 14 | 14 | | bonds issued by a district shall be sold after advertising for and |
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| 15 | 15 | | receiving competitive sealed bids and shall be awarded to the |
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| 16 | 16 | | bidder whose bid produces the lowest net effective interest rate to |
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| 17 | 17 | | the district. |
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| 18 | 18 | | (b) Except for refunding bonds, bonds issued by a municipal |
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| 19 | 19 | | utility district, or bonds sold to a state or federal agency or to |
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| 20 | 20 | | the North American Development Bank, before any bonds are sold by a |
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| 21 | 21 | | district, the board shall publish an appropriate notice of the |
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| 22 | 22 | | sale: |
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| 23 | 23 | | (1) at least one time not less than 10 days before the |
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| 24 | 24 | | date of sale in a newspaper of general circulation in the county or |
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| 25 | 25 | | counties in which the district is located; and |
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| 26 | 26 | | (2) at least one time in one or more recognized |
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| 27 | 27 | | financial publications of general circulation in the state as |
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| 28 | 28 | | approved by the state attorney general. |
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| 29 | 29 | | (c) If the district is issuing bonds and refunding bonds as |
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| 30 | 30 | | one issue and if the initial principal amount of refunding bonds is |
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| 31 | 31 | | 50 percent or more of the total initial principal amount of bonds |
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| 32 | 32 | | being issued, for the purposes of subsections (a) and (b) of this |
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| 33 | 33 | | section, the issue shall be considered to be refunding bonds and |
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| 34 | 34 | | competitive bids shall not be required. |
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| 35 | 35 | | (d) Bonds issued by a municipal utility district operating |
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| 36 | 36 | | under Chapter 54, Water Code, may be sold at a public or private |
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| 37 | 37 | | sale under the terms determined by the governing body of the |
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| 38 | 38 | | municipal utility district to be in the district's best interest. |
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| 39 | 39 | | (d)(e) A district's bonds are negotiable instruments within |
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| 40 | 40 | | the meaning and purposes of the Business & Commerce Code. A |
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| 41 | 41 | | district's bonds may be issued and bear interest in accordance with |
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| 42 | 42 | | Chapters 1201, 1204, and 1371, Government Code, and Subchapters |
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| 43 | 43 | | A-C, Chapter 1207, Government Code. Except for this subsection, |
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| 44 | 44 | | this section does not apply to special water authorities or |
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| 45 | 45 | | districts described in Section 49.181(h)(4). |
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| 46 | 46 | | (e)(f) Subsections (a) and (b) do not apply to district |
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| 47 | 47 | | bonds issued pursuant to Chapter 1371, Government Code. |
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| 48 | 48 | | SECTION 2. This Act takes effect immediately if it receives |
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| 49 | 49 | | a vote of two-thirds of all the members elected to each house, as |
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| 50 | 50 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 51 | 51 | | Act does not receive the vote necessary for immediate effect, this |
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| 52 | 52 | | Act takes effect September 1, 2009. |
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