| 1 | 1 | | 87R7094 SLB-F |
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| 2 | 2 | | By: Alvarado S.B. No. 606 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the sale of bonds by certain special purpose 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 by |
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| 10 | 10 | | amending Subsections (a), (b), and (e) and adding Subsections |
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| 11 | 11 | | (a-1), (f), (g), (h), and (i) to read as follows: |
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| 12 | 12 | | (a) Bonds [Except for refunding bonds, 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 either by: |
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| 15 | 15 | | (1) private sale; or |
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| 16 | 16 | | (2) public sale after advertising for and receiving |
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| 17 | 17 | | competitive sealed bids. |
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| 18 | 18 | | (a-1) Bonds sold by public sale [and] shall be awarded to |
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| 19 | 19 | | the bidder whose bid produces the lowest net effective interest |
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| 20 | 20 | | rate to the district. |
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| 21 | 21 | | (b) Before [Except for refunding bonds, or bonds sold to a |
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| 22 | 22 | | state or federal agency or to the North American Development Bank, |
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| 23 | 23 | | before] any bonds are sold by a district by public sale, the board |
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| 24 | 24 | | shall publish an appropriate notice of the sale: |
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| 25 | 25 | | (1) at least one time not less than 10 days before the |
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| 26 | 26 | | date of sale in a newspaper of general circulation in the county or |
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| 27 | 27 | | counties in which the district is located; and |
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| 28 | 28 | | (2) at least one time in one or more recognized |
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| 29 | 29 | | financial publications of general circulation in the state as |
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| 30 | 30 | | approved by the state attorney general. |
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| 31 | 31 | | (e) Subsections (a), (a-1), and (b) do not apply to district |
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| 32 | 32 | | bonds issued pursuant to Chapter 1371, Government Code. |
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| 33 | 33 | | (f) For bonds sold by private sale, the district may: |
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| 34 | 34 | | (1) authorize: |
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| 35 | 35 | | (A) the principal amount of bonds that may be |
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| 36 | 36 | | issued; |
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| 37 | 37 | | (B) the principal amount to mature each year; |
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| 38 | 38 | | (C) the maximum rate of interest to be borne by |
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| 39 | 39 | | the bonds; and |
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| 40 | 40 | | (D) any other term the district considers |
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| 41 | 41 | | relevant to the issuance of the bonds; and |
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| 42 | 42 | | (2) delegate to any officer or director of the |
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| 43 | 43 | | district the authority to carry out the sale of the bonds. |
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| 44 | 44 | | (g) In exercising the authority delegated by the district |
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| 45 | 45 | | under Subsection (f), the district may establish the terms related |
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| 46 | 46 | | to the issuance and sale of the bonds, including: |
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| 47 | 47 | | (1) the form of the bonds; |
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| 48 | 48 | | (2) the principal amount of the bonds and the amount of |
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| 49 | 49 | | the bonds to mature each year; |
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| 50 | 50 | | (3) the dates, price, interest rates, interest payment |
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| 51 | 51 | | dates, principal payment dates, and redemption feature of the |
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| 52 | 52 | | bonds; and |
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| 53 | 53 | | (4) any other term relating to the issuance and sale of |
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| 54 | 54 | | the bonds as specified by the district in the proceedings |
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| 55 | 55 | | authorizing the issuance of the bonds. |
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| 56 | 56 | | (h) A finding or determination made by a director or officer |
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| 57 | 57 | | acting under the authority delegated to that director or officer |
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| 58 | 58 | | has the same force and effect as a finding or determination made by |
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| 59 | 59 | | the district. |
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| 60 | 60 | | (i) A district's bonds are negotiable instruments within |
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| 61 | 61 | | the meaning and purposes of the Business & Commerce Code. A |
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| 62 | 62 | | district's bonds may be issued and bear interest in accordance with |
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| 63 | 63 | | Chapters 1201, 1204, and 1371, Government Code, and Subchapters A |
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| 64 | 64 | | through C, Chapter 1207, Government Code. Except for this |
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| 65 | 65 | | subsection, this section does not apply to a special water |
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| 66 | 66 | | authority or district described by Section 49.181(h)(1)(D). |
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| 67 | 67 | | SECTION 2. Section 49.183(c), Water Code, is repealed. |
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| 68 | 68 | | SECTION 3. Section 49.183, Water Code, as amended by this |
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| 69 | 69 | | Act, applies only to the sale of bonds by a special purpose district |
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| 70 | 70 | | on or after the effective date of this Act. The sale of bonds by a |
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| 71 | 71 | | special purpose district before the effective date of this Act is |
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| 72 | 72 | | governed by the law in effect when bonds were sold, and the former |
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| 73 | 73 | | law is continued in effect for that purpose. |
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| 74 | 74 | | SECTION 4. This Act takes effect immediately if it receives |
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| 75 | 75 | | a vote of two-thirds of all the members elected to each house, as |
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| 76 | 76 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 77 | 77 | | Act does not receive the vote necessary for immediate effect, this |
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| 78 | 78 | | Act takes effect September 1, 2021. |
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