Texas 2013 - 83rd Regular

Texas Senate Bill SB449 Compare Versions

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Old	New	Differences
1	1	83R24769 JTS-F
2	2	By: Hinojosa S.B. No. 449
3	3	(Flynn, Hilderbran)
4	4	Substitute the following for S.B. No. 449: No.
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the issuance of certain capital appreciation bonds by
10	10	political subdivisions.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subchapter B, Chapter 1201, Government Code, is
13	13	amended by adding Section 1201.0245 to read as follows:
14	14	Sec. 1201.0245. CAPITAL APPRECIATION BONDS BY POLITICAL
15	15	SUBDIVISIONS. (a) In this section, "capital appreciation bond"
16	16	means a bond that accrues and compounds interest from its date of
17	17	delivery, the interest on which by its terms is payable only upon
18	18	maturity or prior redemption.
19	19	(b) A county, municipality, special district, school
20	20	district, junior college district, or other political subdivision
21	21	may not issue capital appreciation bonds that are secured by ad
22	22	valorem taxes unless:
23	23	(1) the bonds have a scheduled maturity date that is
24	24	not later than 20 years after the date of issuance;
25	25	(2) the governing body of the political subdivision
26	26	has received a written estimate of the cost of the issuance,
27	27	including:
28	28	(A) the amount of principal and interest to be
29	29	paid until maturity;
30	30	(B) the amount of fees to be paid to outside
31	31	vendors, including vendors who sell products to be financed by the
32	32	bond issuance;
33	33	(C) the amount of fees to be paid to each
34	34	financing team member; and
35	35	(D) the projected tax impact of the bonds and the
36	36	assumptions on which the calculation of that impact is based;
37	37	(3) the governing body of the political subdivision
38	38	has determined in writing whether any personal or financial
39	39	relationship exists between the members of the governing body and
40	40	any financial advisor, bond counsel, bond underwriter, or other
41	41	professional associated with the bond issuance; and
42	42	(4) the governing body of the political subdivision
43	43	posts prominently on the political subdivision's Internet website
44	44	and enters in the minutes of the governing body:
45	45	(A) the total amount of the bonds to be voted on;
46	46	(B) the length of maturity of the bonds;
47	47	(C) the projects proposed to be financed with
48	48	bond proceeds;
49	49	(D) the amount of the political subdivision's
50	50	total bonded indebtedness at the time of the election, including
51	51	the amount of principal and interest to be paid until maturity;
52	52	(E) the information received under Subdivision
53	53	(2) and determined under Subdivision (3); and
54	54	(F) the political subdivision's total amount of
55	55	outstanding bonded indebtedness, updated quarterly, including the
56	56	amount of principal and interest to be paid until maturity.
57	57	(c) The total amount of capital appreciation bonds may not
58	58	exceed 25 percent of the political subdivision's total outstanding
59	59	bonded indebtedness at the time of the issuance, including the
60	60	amount of principal and interest to be paid on the outstanding bonds
61	61	until maturity.
62	62	(d) Except as provided by Subsection (e), a county,
63	63	municipality, special district, school district, junior college
64	64	district, or other political subdivision may not extend the
65	65	maturity date of an issued capital appreciation bond, including
66	66	through the issuance of refunding bonds that extend the maturity
67	67	date.
68	68	(e) A school district may extend the maturity date of an
69	69	issued capital appreciation bond only if:
70	70	(1) the maximum legally allowable tax rate for
71	71	indebtedness has been adopted; and
72	72	(2) the attorney general certifies in writing that the
73	73	solvency of the permanent school fund's bond guarantee program
74	74	would be threatened without the extension.
75	75	(f) Subsection (b) does not apply to the issuance of
76	76	refunding bonds under Chapter 1207.
77	77	(g) Subsection (b) does not apply to the issuance of capital
78	78	appreciation bonds for the purpose of financing transportation
79	79	projects.
80	80	SECTION 2. The change in law made by this Act does not
81	81	affect the validity of capital appreciation bonds issued before the
82	82	effective date of this Act.
83	83	SECTION 3. This Act takes effect September 1, 2013.