Texas 2013 - 83rd Regular

Texas Senate Bill SB1384 Compare Versions

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1	1	By: Hancock S.B. No. 1384
2	2	(In the Senate - Filed March 7, 2013; March 18, 2013, read
3	3	first time and referred to Committee on Education; April 23, 2013,
4	4	reported favorably by the following vote: Yeas 9, Nays 0;
5	5	April 23, 2013, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to the authority of an independent school district to
11	11	invest in local water projects.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 2256.0204, Government Code, is amended
14	14	by amending Subsections (a), (d), (e), (f), and (g) and adding
15	15	Subsection (c-1) to read as follows:
16	16	(a) In this section:
17	17	(1) "Corporate[, "corporate] bond" means a senior
18	18	secured debt obligation issued by a domestic business entity and
19	19	rated not lower than "AA-" or the equivalent by a nationally
20	20	recognized investment rating firm. The term does not include a debt
21	21	obligation that:
22	22	(A) [(1)] on conversion, would result in the
23	23	holder becoming a stockholder or shareholder in the entity, or any
24	24	affiliate or subsidiary of the entity, that issued the debt
25	25	obligation; or
26	26	(B) [(2)] is an unsecured debt obligation.
27	27	(2) "Governing body" means the commissioners court of
28	28	a county or the governing body of a municipality.
29	29	(3) "Local water bond" means a secured debt obligation
30	30	issued by a municipality or county in which the investing school
31	31	district is located and that is:
32	32	(A) rated not lower than "AA-" or the equivalent
33	33	by a nationally recognized investment rating firm; and
34	34	(B) issued to finance a local water project.
35	35	(4) "Local water project" means the acquisition,
36	36	design, construction, improvement, repair, or maintenance of land,
37	37	buildings, equipment, facilities, or improvements found by the
38	38	governing body to be required or suitable for the promotion of water
39	39	development, including water supply facilities, wastewater
40	40	treatment facilities, water distribution and wastewater conveyance
41	41	facilities, and storm drainage, flood control, watershed
42	42	protection, and water conservation projects, regardless of whether
43	43	the land, buildings, equipment, facilities, or improvements are in
44	44	existence or are to be acquired or constructed after the finding is
45	45	made.
46	46	(c-1) In addition to authorized investments permitted by
47	47	this subchapter, an independent school district subject to this
48	48	section may purchase, sell, and invest its funds and funds under its
49	49	control in local water bonds that, at the time of purchase, are
50	50	rated by a nationally recognized investment rating firm "AA-" or
51	51	the equivalent and have a stated final maturity date that is not
52	52	later than the 10th anniversary of the date the local water bonds
53	53	were purchased.
54	54	(d) An independent school district subject to this section
55	55	is not authorized by this section to:
56	56	(1) invest in the aggregate more than 15 percent of its
57	57	monthly average fund balance, excluding bond proceeds, reserves,
58	58	and other funds held for the payment of debt service, in corporate
59	59	bonds or local water bonds; or
60	60	(2) invest more than 25 percent of the funds invested
61	61	in corporate bonds in any one domestic business entity, including
62	62	subsidiaries and affiliates of the entity.
63	63	(e) An independent school district subject to this section
64	64	may purchase, sell, and invest its funds and funds under its control
65	65	in corporate bonds or local water bonds if the governing body of the
66	66	district:
67	67	(1) amends its investment policy to authorize
68	68	corporate bonds or local water bonds as an eligible investment;
69	69	(2) adopts procedures to provide for:
70	70	(A) monitoring rating changes in corporate bonds
71	71	or local water bonds acquired with public funds; and
72	72	(B) liquidating the investment in corporate
73	73	bonds or local water bonds; and
74	74	(3) identifies the funds eligible to be invested in
75	75	corporate bonds or local water bonds.
76	76	(f) The investment officer of an independent school
77	77	district, acting on behalf of the district, shall sell corporate
78	78	bonds or local water bonds in which the district has invested its
79	79	funds not later than the seventh day after the date a nationally
80	80	recognized investment rating firm:
81	81	(1) issues a release that places the corporate bonds
82	82	or the domestic business entity that issued the corporate bonds, or
83	83	the local water bonds or the municipality or county that issued the
84	84	local water bonds, on negative credit watch or the equivalent, if
85	85	the corporate bonds or local water bonds are rated "AA-" or the
86	86	equivalent at the time the release is issued; or
87	87	(2) changes the rating on the corporate bonds or local
88	88	water bonds to a rating lower than "AA-" or the equivalent.
89	89	(g) Corporate bonds or local water bonds are not an eligible
90	90	investment for a public funds investment pool.
91	91	SECTION 2. This Act takes effect immediately if it receives
92	92	a vote of two-thirds of all the members elected to each house, as
93	93	provided by Section 39, Article III, Texas Constitution. If this
94	94	Act does not receive the vote necessary for immediate effect, this
95	95	Act takes effect September 1, 2013.
96	96	* * * * *