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