HBA-NLM C.S.H.B. 3224 76(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3224 By: Capelo Financial Institutions 4/26/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, several provisions of the Bond and Warrant Law of 1931 are no longer applicable to the procedures relating to the issuance of utility system revenue bonds and time warrant bonds. The purpose of this bill is to clarify, amend, and repeal specified provisions, in accordance with the ongoing efforts to codify numerous public securities statutes into a Public Securities Title of the Government Code. C.S.H.B 3224 sets forth nonsubstantive revisions to specified laws relating to public securities proposed by H.B. 3157, 76th Legislature, Regular Session, 1999. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Establishes that this Act is a nonsubstantive revision of the law relating to public securities proposed by H.B. 3157, 76th Legislature, Regular Session, 1999. Provides that this Act takes effect September 1, 1999, but only if H.B. 3157 is enacted and becomes law. SECTION 2. Amends Section 1201.027, Government Code, as follows: Sec. 1201.027. New title: AUTHORITY OF ISSUER TO CONTRACT FOR SERVICES. Provides that the governing body of an issuer has exclusive authority to select, contract with, and determine the basis for compensation of a person to provide legal and other services as may be determined by the governing body. Deletes existing text relating to the authority of the governing body of a home rule municipality or other political subdivisions and entities. SECTION 3. Amends Section 1205.023, Government Code, to include a class action binding on certain persons, among the list of actions under this chapter. SECTION 4. Amends Section 1205.041(b), Government Code, to provide that the order must, in general terms and without naming them, advise, rather than require, the persons otherwise described by this section and the attorney general of certain rights. SECTION 5. Amends Section 1205.044, Government Code, to clarity that the effect of notice given under Sections 1205.041 and 1205.043 is that each person described by Section 1205.041(a) is a party, rather than defendant, to the action. Makes a conforming change. SECTION 6. Amends Section 1205.068(e), Government Code, to provide that an appeal under this section is governed by the rules of the supreme court for accelerated appeals in civil cases. SECTION 7. Subchapter A, Chapter 1207, Government Code, by adding Sections 1207.007 and 1207.008, as follows: Sec. 1207.007. DELEGATION OF AUTHORITY. Authorizes the governing body of an issuer, in connection with the issuance of refunding bonds, to take certain actions. Authorizes the officer or employee to establish the terms and details related to the issuance and sale or exchange of the refunding bonds, in exercising the authority delegated by the governing body of the issuer to the officer or employee. Provides that a finding or determination made by an officer or employee acting under the authority delegated to the officer or employee has the same force and effect as a finding or determination made by the governing body of the issuer. Sec. 1207.008. LIMITATION. Prohibits an issuer from issuing refunding bonds under certain conditions, unless the governing body of the issuer finds that the issuance is in the best interests of the issuer, and the maximum amount by which the aggregate amount of payments to be made under the refunding bonds exceed a specified amount. SECTION 8. Amends Section 1207.022, Government Code, to delete existing Subsection (b) relating to the prohibition on the issuance of refunding bonds to make deposits in connection with the refunding of certain electric and gas system bonds. SECTION 9. Amends Section 1207.025(a), Government Code, to authorize the comptroller to register refunding bonds in the manner provided, rather than to provide that refunding bonds must be registered by the comptroller. SECTION 10. Amends Section 1207.033, Government Code, by adding Subsections (c) and (d), as follows: (c) Provides that, after firm banking and financial arrangements for the discharge and final payment or redemption of the obligation have been made under this section, all rights of an issuer to initiate other action amending the terms of the obligation are extinguished. Provides that the right to call the obligations for redemption is not extinguished under certain conditions. (d) Provides that Subsection (c) applies only to firm banking and financial arrangements made after September 1, 1999. SECTION 11. Amends Section 1207.062, Government Code, by amending Subsections (b) and (c) and adding Subsection (d) and (e), as follows: (b) Authorizes a deposit under Section 1207.061 to be invested only in direct noncallable obligations of the United States, noncallable obligations of an agency or instrumentality of the United States that are rated as to investment quality by a nationally recognized investment rating firm, and noncallable obligations of a state or agency or a county, or other political entities of a state that have been refunded and that are rated in the manner specified. (c) Authorizes a deposit under Section 1207.061 to be invested only in certain obligations. (d) Created from existing text. (e) Prohibits a deposit, notwithstanding Subsection (b), under an escrow agreement entered into under this section with respect to an obligation issued or incurred before September 1, 1999, from being invested in an investment described by Subsection (b). SECTION 12. Amends Section 1231.044(b), Government Code, to require the state auditor to prepare a report of the review and file a copy of the report with the board. Makes nonsubstantive changes. SECTION 13. Amends Section 1331.001, Government Code, to delete text relating to the authority of a municipality to issue bonds payable from ad valorem taxes with one or more interest coupons. SECTION 14. Amends Section 1331.002, Government Code, as follows: Sec. 1331.002. New title: SIGNATURES. Provides that bonds issued by a municipality under Section 1331.001 must be signed in the manner provided by the proceedings authorizing the issuance of the bonds, rather than by the mayor and countersigned by the municipal secretary. Makes a nonsubstantive change. SECTION 15. Amends Sections 1371.001(1), (4), and (5), Government Code, to redefine "credit agreement," "issuer," and "obligation." SECTION 16. Amends Subchapter A, Chapter 1371, Government Code, by adding Section 1371.004, as follows: Sec. 1371.004. EFFECT OF FINDING OR DETERMINATION UNDER DELEGATION OF AUTHORITY. Provides that a finding or determination made by an officer or employee acting under the authority delegated to the officer or employee has the same force and effect as a finding or determination made by the governing body of the issuer. SECTION 17. Amends Section 1371.053(a), Government Code, to clarify that a governing body must adopt or approve an obligation authorization before an obligation may be issued, rather than to provide that the issuance of an obligation must be authorized by an obligation authorization. SECTION 18. Amends Section 1371.056, Government Code, as follows: (a) Redesignated from existing Subsection (c). Authorizes a governing body to authorize the execution and delivery of a credit agreement in connection with or related to the authorization, issuance, security, purchase, payment, sale, resale, redemption, remarketing, or exchange of an obligation at any time. Deletes the existing text of Subsections (a) and (b). (b)-(d) Redesignated from existing Subsections (d)-(f). (e) Authorizes the governing body to delegate to an officer or employee the authority to enter into a credit agreement and transactions under a credit agreement; and execute any instruments in connections with those transactions. SECTION 19. Amends Subchapter B, Chapter 1371, Government Code, by amending Sections 1371.057(b) and 1371.058 and adding Sections 1371.059 and 1371.060, as follows: Sec. 1371.057. REVIEW AND APPROVAL OF OBLIGATION, CREDIT AGREEMENT, AND CONTRACT BY ATTORNEY GENERAL. Requires the attorney general to deliver to the comptroller a copy of the attorney general's legal opinion stating approval and the record of proceedings. Sec. 1371.058. REGISTRATION. Requires the comptroller to register the record of the proceeding relating to the issuance of obligation or the execution of a credit agreement, on receipt of the documents required by Section 1371.057(b). Sec. 137.059. VALIDITY AND INCONTESTABILITY. Includes the registration by the comptroller among the provisions of this section relating to valid and binding obligations. Sec. 1371.060. REFINANCING, RENEWAL, OR REFUNDING OF OBLIGATION OR CREDIT AGREEMENT. Redesignated from existing Section 1371.060. SECTION 20. Amends Section 1371.103 (b), Government Code, to authorize a governing body to secure and pay the cost of a credit agreement executed and delivered in connection with the financing of a project cost with the sources permitted by this chapter, and ad valorem taxes to the extent the project cost relates to an eligible project for which there exists authorized but unissued obligations payable from ad valorem taxes. SECTION 21. Amends the heading to Chapter 1502, Government Code, as follows: CHAPTER 1502. New title: PUBLIC SECURITIES FOR MUNICIPAL UTILITIES, PARKS, OR POOLS SECTION 22. Amends Subchapters A and B, Chapter 1502, Government Code, as follows: Sec. 1502.001. DEFINITIONS. Defines "combined system," "public security," and "utility system." Sec. 1502.002. GENERAL AUTHORITY FOR UTILITY SYSTEMS, PARKS, AND POOLS. Authorizes a municipality to the certain actions with respect to a utility system, a park, or a swimming pool. Authorizes the governing body of a municipality to authorize the execution and delivery of certain contracts. Sec. 1502.003. CREATION AND MAINTENANCE OF COMBINED SYSTEM. Authorizes the governing body of a municipality to create and maintain one or more combined systems on a finding of municipality best interest by the governing body, notwithstanding any law or municipal charter provision to the contrary. Specifies that a finding by a governing body under this section is conclusive and incontestable. Sec. 1502.004. CONFLICT WITH MUNICIPAL CHARTER. Provides that to the extent of conflict between this chapter and a municipal charter, this chapter controls. SUBCHAPTER B. New title: PUBLIC SECURITIES FOR UTILITY SYSTEMS, PARKS, OR POOLS Sec. 1502.051. AUTHORITY TO ISSUE PUBLIC SECURITIES. (a) Authorizes the governing body of a municipality to provide funds for certain acquisitions, purchases, improvements, and equipment for a utility system, a park, or a swimming pool. (b) Authorizes the governing body, in connection with exercising the authority to provide funds for the purpose described by Subsection (a), to acquire, purchase, or otherwise obtain interest in property, including additional water or riparian rights. (c) Authorizes the governing body to issue public securities and incur obligations under contracts in accordance with this chapter. Deletes existing definitions of "encumbered facility" and "utility system." Sec. 1502.052. PLEDGE OF REVENUE. Authorizes the governing body of a municipality to pledge to the payment of any public securities issued or any obligation incurred under Section 1502.51(c), all or any part of the revenue of a utility system, a park, or a swimming pool. Deletes text from existing Section 1502.052 (Authority to Build, Purchase, or Encumber Utility System, Sanitary Disposal Equipment, Park, or Pool), and deletes existing Section 1502.053 (Authority to Issue Bonds, Notes, or Warrants). Sec. 1502.053. GRANT OF FRANCHISE. Redesignated from Section 1502.055. Authorizes the municipality to grant a purchaser under sale or foreclosure a franchise, as additional security for public securities issued or obligations incurred under this chapter, rather than the encumbrance, subject to all laws regulating the operation of the facility or property in force at the time of the sale or foreclosure. Makes nonsubstantive changes. Sec. 1502.054. OBLIGATIONS NOT PAYABLE FROM TAXES. Redesignated from Section 1502.056. Sets forth specified provisions of a public security issued or an obligation incurred under this chapter. Makes conforming changes. Sec. 1502.055. ELECTION. Redesignated from Section 1502.057. Deletes text prohibiting the municipality from encumbering a utility system, park, or swimming pool for more than $10,000. Makes nonsubstantive changes. Sec. 1502.056. OPERATING EXPENSES AS FIRST LIEN. Redesignated from Section 1502.058. Provides that, if the revenue of a utility system, park, or swimming pool secure the payment of public securities issued or obligations incurred under this chapter, rather than is encumbered under this subchapter, each expense of operation and maintenance is a first lien against that revenue. Authorizes certain contracts between a municipality and an issuer to provide that payments made by the municipality from the revenue of the utility system are an operating expense of the municipality's utility system. Sec. 1502.057. CHARGES FOR SERVICES. Redesignated from Section 1502.059. Requires a municipality to impose and collect charges for services provided by a utility system, rather than an encumbered system, in specified amounts. Makes conforming changes. Sec. 1502.058. LIMITATION ON USE OF REVENUE. Redesignated from Section 1502.060. Prohibits the use of revenue from a utility system, park, or swimming pool to pay any other debt, expense, or obligation, except as otherwise provided by this section, Section 1502.059 or by Section 271.052, Local Government Code. Provides that this section does not apply to a payment made from surplus revenue of a utility system, park, or swimming pool. Makes conforming changes. Sec. 1502.059. TRANSFER OF REVENUE TO GENERAL FUND. Redesignated from Section 1502.061. Makes conforming changes. Sec. 1502.060. USE AND INVESTMENT OF PROCEEDS. (a) Authorizes a municipality to specified use of proceeds, to the extent provided by the proceedings authorizing the issuance of the public securities issued under this chapter. (b) Authorizes a municipality to use certain proceeds to pay interest on the public securities during a specified time period. (c) Authorizes a municipality to use certain proceeds to provide specified reserves and to obtain a credit agreement as provided by Section 1502.064. (d) Authorizes a municipality to invest certain proceeds to the extent and in the manner provided in the proceedings authorizing the issuance of the public securities. Deletes existing Section 1502.062 (Use of Bond Proceeds: Municipality With Population of 75,000 or More). Sec. 1502.061. ADDITIONAL OBLIGATIONS TO IMPROVE OR EXTEND UTILITY SYSTEM. Authorizes a municipality that has outstanding public securities secured by the net revenue of a utility system, rather than one or more utility systems, to issue additional public securities or incur other obligations for a purpose described by Section 1502.051, under any terms specified by the proceedings authorizing the issuance of the outstanding public securities. Provides that public securities issued under this section constitute a lien on the revenue of the affected system inferior to a lien securing payment of outstanding public securities, as determined by the governing body of the municipality. Deletes text relating to the issuance of bonds for the improvement or extension of one or more utility system. Makes conforming changes. Sec. 1502.062. MATURITY. Provides that a public security issued under this chapter must mature not later than 50 years after its date. Sec. 1502.063. ADDITIONAL AUTHORITY OF MUNICIPALITY WITH A POPULATION OF 50,000 OR MORE. Authorizes a municipality with a population of 50,000 or more, notwithstanding any other provision of this chapter, to exercise any authority granted to a governing body under Chapter 1371 in connection with the issuance of obligations under that chapter. Sec. 1502.064. CREDIT AGREEMENT FOR RESERVE FUND. Authorizes the governing body of a municipality to provide that in lieu of or in addition to providing a cash reserve, a credit agreement may be used to provide the reserve. Provides that a credit agreement obtained to provide a reserve must be submitted to the attorney general for examination and approval. Provides that, after approval by the attorney general, the credit agreement is incontestable in any court or other forum for any reason and is a valid and binding obligation of the municipality in accordance with its terms for all purposes. Sec. 1502.065. REFUNDING BONDS. Authorizes a municipality to issue public securities in the manner provided by applicable law to refund or otherwise refinance any obligation incurred under this chapter to which revenue has been pledged. Deletes existing Sections 1502.065 (Lien Priority: Refunding Bonds), and 1502.066 (Bonds For Acquisition of Hydroelectric Generating Facilities). Sec. 1502.066. RECORDS. Redesignated from Section 1502.067. Makes conforming changes. Sec. 1502.067. RECORDS: NONCASH BASIS. Redesignated from Section 1502.068. Makes conforming changes. Sec. 1502.068. ANNUAL REPORT. Redesignated from Section 1502.069. Requires the superintendent or manager of a utility system, park, or pool or another person designated by the governing body, annually, on the date determined by the governing body of the musicality, to file with the mayor and governing body of the municipality a detailed report of the operation of the system, park, or pool for the preceding 12-month period specified by the governing body. Deletes text relating to the requirements of the superintendent or manager of a plant encumbered under this subchapter. Makes conforming changes. Sec. 1502.069. OFFENSES; PENALTY. Redesignated from Section 1502.070. Provides that the person responsible for filing the report required by Section 1502.068 commits an offense if the person, rather than superintendent or manager, fails to timely file the report. Makes nonsubstantive changes. Sec. 1502.070. New title: MANAGEMENT AND CONTROL OF UTILITY SYSTEM. Redesignated from Section 1502.071. Authorizes management and control of a utility system to be vested in specified authorities. Deletes text relating to the authority given by a contract under which a facility is encumbered. Makes conforming changes. Sec. 1502.071. RULES. Redesignated from Section 1502.072. Makes a conforming change. Sec. 1502.072. TRUSTEE. Redesignated from Section 1502.073. Makes a conforming change. Sec. 1502.073. NOTICE TO GOVERNING BODY BEFORE FORECLOSURE OR OTHER ACTION. Redesignated from Section 1502.074. Sec. 1502.074. CIVIL ENFORCEMENT. Redesignated from Section 1502.076. Makes conforming changes. Deletes existing Section 1502.077 (Conflicts With Municipal Charter.) Sec. 152.075. Deletes existing Section. (Appropriation Of Utility System Income: Municipality With Population Of 12,410 Or Less). SECTION 23. Amends Section 1506.164, Government Code, to provide that this subchapter is cumulative of all other law on the subject, but this subchapter is wholly sufficient authority within itself for the issuance of bonds and the performance of the other acts and procedures authorized by this subchapter without reference to any other law or any restrictions or limitations contained in that law, except as specifically provided by this subchapter. SECTION 24. Amends Section 152.001(a), Water Code, to provided that this chapter applies only to a river authority that, directly or through a corporation created under Section 152.051, is engaged in the distribution and sale of electric energy to the public. SECTION 25. Amends Section 152.052, Water Code, by adding Subsection (d), to authorize a corporation created under Section 152.051 and the creating river authority to share officers, directors, employees, equipment and facilities, and provide goods or services to each other at cost without the requirement of competitive bidding. SECTION 26. Amends Subchapter B, Chapter 152, Water Code, by adding Sections 152.056 and 152.057, as follows: Sec. 152.056. TRANSFER OF RIVER AUTHORITY ASSETS TO CORPORATION. Authorizes the board of directors (board) of a river authority to sell, lease, loan or otherwise transfer some, all, or substantially all of the electric generation property of the river authority to a corporation created under Section 152.051. Provides that the property transfer must be made under terms approved by the board. Sec. 152.057. APPLICATION OF OTHER LAW TO RIVER AUTHORITY. Provides that reference in any other law to certain river authorities includes a river authority that has created a corporation under Section 152.051 that is engaged in the distribution and sale of electric energy to the public. SECTION 27. Amends Section 152.156, Water Code, to delete text authorizing an economic development program to involve the granting or lending of money, services, or property to a person engaged in the following economic development activities: _a public fire fighting organization; _a governmental body; _a nonprofit corporation; _a local or regional development council; or _an other nonprofit or noncommercial organization. SECTION 28. Amends Section 152.201, Water Code, to provide that this chapter constitutes full authority for a river authority to issue revenue bonds and other obligations without reference to any other law. Makes a nonsubstantive change. SECTION 29. Amends Chapter 152, Water Code, by adding a new Subchapter G, as follows: SUBCHAPTER G. ELECTRIC TRANSMISSION SERVICES AND FACILITIES OF RIVER AUTHORITY Sec. 152.301. ELECTRIC TRANSMISSION SERVICES AND FACILITIES. Authorizes a river authority to provide certain transmission services, and acquire, finance, lease, construct, rebuild, operate, or sell electric transmission facilities at any location within or outside the boundaries of the river authority. Sec. 152.302 LIMITATION ON ELECTRIC TRANSMISSION FACILITIES. Provides that this subchapter does not authorize a river authority to construct electric transmission facilities for an ultimate consumer of electricity to enable that consumer to bypass the transmission or distribution facilities of its existing provider. SECTION 30. Amends Section 418.107(d), Government Code, to require the time warrants issued under this chapter to be issued in accordance with Chapter 252, Local Government Code, in the case of a municipality, or Subchapter C, Chapter 262, Local Government Code, in the case of a county, rather than in accordance with the Bond and Warrant Law of 1931, Article 2368a, V.T.C.S. Subjects time warrants under this section to the right of the voters to require a referendum vote under Section 252.045 or 262.029, Local Government Code, as applicable, rather than Section 4 of the Bond and Warrant Law of 1931. SECTION 31. Amends Section 1433.022(b), Government Code, to authorize land previously acquired by an issuer by eminent domain to be sold, leased, or otherwise used, if the governing body determines that the land was not acquired for park purposes unless the sale or lease of that land has been approved at an election held under Section 1502.055, rather than 1502.057. SECTION 32. Amends Sections 263.026(b) and (i), Health and Safety Code, as follows: (b) Provides that bonds and taxes, under the authority of the commissioners court to pay the principal of and interest on the bonds, must be accordance with Subtitles A and C, Title 9, Government Code, rather than Chapter 1, Title 22, V.T.C.S. Provides that the time warrants under the authority of the commissioner court must be in accordance with Subchapter C, Chapter 262, Local Government Code, rather than the Bond and Warrant Law of 1931. (i) Deletes text relating to the authority of the commissioners court to issue refunding bonds to refund time warrants issued under this section, subject to the Bond and Warrant Law of 1931. SECTION 33. Amends Section 264.033, Health and Safety Code, to authorize the commissioners court to issue time warrants under Subchapter C, Chapter 262, Local Government Code, rather than the Bond and Warrant Law of 1931. SECTION 34. Amends Section 383.013(c), Health and Safety Code, to delete text relating to the applicability of the Bond and Warrant Law of 1931 to this subsection. SECTION 35. Amends Section 43.074(f), Local Government Code, to provided that refunding bonds must be issued in the manner provided by Chapter 1207, Government Code, rather than the Bond and Warrant Law of 1931. SECTION 36. Amends Section 43.075(h), Local Government Code, to provided that the refunding bonds or warrants must be issued in the manner provided by Chapter 1207, Government Code, rather than the Bond and Warrant Law of 1931. SECTION 37. Amends Sections 43.076(h) and (i), Local Government Code, as follows: (h) Makes a conforming change. (i) Provides that Subchapter B, Chapter 1502, Government Code, applies to the revenue refunding bonds, except as otherwise provided. Provides that revenue refunding bonds or general obligation refunding bonds must be issued in the manner provided by Chapter 1207, Government Code. Deletes text relating to the authority of the municipality to exercise the authority granted under Chapter 541, Acts of the 51st Legislature, Regular Session, Article 1118n-5, V.T.C.S.. SECTION 38. Amends Section 252.045(c), Local Government Code, as follows: (c) Provides that the provisions of Subtitles A and C, Title 9, Government Code, govern the referendum and the time warrants to the extent those provisions are consistent with this chapter. Provides that the time warrants may mature over a term exceeding 40 years under certain conditions. Deletes text relating to the provisions of Chapter 1 and 2, Title 22, V.T.C.S., and Chapter 163, General Laws, Acts of the 42nd Legislature, Regular Session, 1931, Article 2368a, V.T.C.S. SECTION 39. Amends Section 271.042, Local Government Code, to delete text relating to a procedures and conflicts of law under Chapter 252 of this code and the Bond and Warrant Law of 1931. SECTION 40. Amends Section 280.001(c), Local Government Code, to make conforming and nonsubstantive changes. SECTION 41. Amends Section 441.008(b), Local Government Code, to require the commissioners court to impose related taxes in compliance with Chapter 1251, rather than Chapter 1253, Government Code. SECTION 42. Amends Section 22.053(b), Transportation Code, to require the commissioners court of a county that issues time warrants under this section to comply with Subchapter C, Chapter 262, Local Government Code, and Chapter 1251, regarding the imposition of taxes for payment of the time warrants. Deletes text relating to compliance with Chapter 163, General Laws, Acts of the 42nd Legislature, Regular Session, 1931, Article 2368a, V.T.C.S., regarding the levy and collection of taxes in payment of the time warrants. SECTION 43. Amends Section 367.068(a), Transportation Code, to delete the application of Chapter 1253, Government Code, to certain procedures, rights, and accomplishments. SECTION 44. Amends Section 16.345(b), Water Code, to require the bonds to be issued in accordance with, and to authorize a political subdivision to exercise the powers granted by Chapter 1502 (Subchapter B), Chapter 1201, and Chapter 1371, Government Code, rather than specified articles in V.T.C.S. Makes nonsubstantive changes. SECTION 45. Amends Section 2(h), Chapter 702, Acts of the 68th Legislature, Regular Session, 1983, Article 717r, V.T.C.S., to require the bond election to be held in the manner prescribed by Chapter 1251, Government Code, for the issuance of municipal bonds, rather than Section 7 of the Bond and Warrant Law of 1931. SECTION 46. Provides that all public securities authorized and issued by any issuer before September 1, 1999, a public security authorization approved or adopted by an issuer in connection with the authorization and issuance of the public securities, and any contracts or agreements executed and delivered in connection with the public securities that were approved by the public security authorization are validated, ratified, and confirmed in all respects. Defines "issuer," "public security," and "public security authorization." SECTION 47. Repealer: Section 1207.081(c), Government Code; Chapter 1253, Government Code; Subchapter C, Chapter 1331, Government Code; Section 1473.052(c), Government Code; Subchapters C-K, Chapter 1502, Government Code; Subchapters B and D, Chapter 1504, Government Code; and Subchapters B and F, Chapter 1509, Government Code. SECTION 48. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3224 redesignates SECTION 1 (proposed Section 1207.007, Government Code), of the original as SECTION 7 in the substitute. The substitute adds a new Section 1207.008 in SECTION 7, as follows: Sec. 1207.008. LIMITATION. Prohibits an issuer from issuing refunding bonds under certain conditions, unless the governing body of the issuer finds that the issuance is in the best interests of the issuer, and the maximum amount by which the aggregate amount of payments to be made under the refunding bonds exceed a specified amount. C.S.H.B. 3224 deletes SECTION 2 ( Section 1207.062(b), Government Code) of the original, which proposed the following amendment: SECTION 2. Amends Section 1207.062(b), Government Code, as follows: (b) Requires an escrow agreement under Subsection (a) to provide that the deposit may be invested only in: (1) direct noncallable obligations of the United States, including obligations the principal of and interest on which are unconditionally guaranteed by the United States; (2) noncallable obligations of an agency or instrumentality of the United States, including obligations the principal and interest of which are unconditionally guaranteed or insured by the agency or instrumentality of the United States and which are rated as to investment quality by a nationally recognized investment rating firm not less than AA or its equivalent; and (3) noncallable obligations of states, agencies, counties, cities, and other political subdivisions of any state which have been refunded and which are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. C.S.H.B. 3224 deletes SECTION 3 (Section 1231.044(b), Government Code) of the original, which proposed the following amendment: SECTION 3. Amends Section 1231.044(b), Government Code, as follows: Sec. 1231.044. STATE AUDITOR REVIEW OF STATE SECURITY PROCEEDS; REPORT. Includes the board among the list of person that the state auditor is required to file a copy of the report of review. C.S.H.B. 3224 redesignates SECTION 4 (Section 1331.001, Government Code) as SECTION 13 of the substitute. C.S.H.B. 3224 redesignates SECTION 5 (Section 1332.002, Government Code) as SECTION 14 of the substitute, to provide that bonds issued by a municipality under Section 1331.001 must be signed in the manner provided by the proceedings authorizing the issuance of the bonds, rather than by the mayor and countersigned by the municipal secretary. C.S.H.B. 3224 redesignates SECTION 6 (Section 1371.001, Government Code) as SECTION 15 of the substitute, and redefines "credit agreement." The term was not addressed in the original. C.S.H.B. 3224 deletes SECTION 7 (proposed Section 1321.003(d), Government Code), of the original which proposed the following: SECTION 7. Amends Section 1321.003, Government Code, by adding new Subsection (d), as follows: (d) Requires any finding or determination made by the governing body of an issuer under authority of this chapter to be binding and conclusive, and provides that any person shall be entitled to rely upon a certification from the issuer to that effect, including, without limitation, the attorney general in the performance of the duties of the attorney general specified in Chapter 1202. C.S.H.B. 3224 deletes SECTION 8 (Section 1371.053, Government Code) of the original which proposed the following amendment: (a) Provides that an obligation authorization must be approved by a governing body before an obligation may be issued. Deletes text providing that the issuance of an obligation must be authorized by an obligation authorization. C.S.H.B. 3224 deletes SECTION 9 (Section 1371.053(b), Government Code) of the original which proposed nonsubstantive changes. C.S.H.B. 3224 redesignates SECTION 10 (proposed Section 1371.056, Government Code), as SECTION 18 of the substitute, and deletes proposed Subsection (g), authorizing the governing body of an issuer to delegate to any officer or employee of the authority to enter into transactions under a credit agreement authorized by the governing body and to execute any instruments in connection with the transactions, and to make the following amendments: SECTION 18. Amends Section 1371.056, Government Code, as follows: (a) Redesignated from existing Subsection (c). Authorizes a governing body to authorize the execution and delivery of a credit agreement in connection with or related to the authorization, issuance, security, purchase, payment, sale, resale, redemption, remarketing, or exchange of an obligation at any time. (b)-(d) Redesignated from existing Subsections (d)-(f). (e) Authorizes the governing body to delegate to an officer or employee the authority to enter into a credit agreement and transactions under a credit agreement; and execute any instruments in connections with those transactions. C.S.H.B. 3224 redesignates SECTION 11 (Section 1371.057, Government Code) as SECTION 19 of the substitute and makes further amendments, as follows: SECTION 19. Amends Subchapter B, Chapter 1371, Government Code, by amending Sections 1371.057(b) and 1371.058 and adding Sections 1371.059 and 1371.060, as follows: Sec. 1371.057. REVIEW AND APPROVAL OF OBLIGATION, CREDIT AGREEMENT, AND CONTRACT BY ATTORNEY GENERAL. Requires the attorney general to deliver to the comptroller a copy of the attorney general's legal opinion stating approval and the record of proceedings. Sec. 1371.058. REGISTRATION. Requires the comptroller to register the record of the proceeding relating to the issuance of obligation or the execution of a credit agreement, on receipt of the documents required by Section 1371.057(b). Sec. 137.059. VALIDITY AND INCONTESTABILITY. Includes the registration by the comptroller among the provisions of this section relating to valid and binding obligations. Sec. 1371.060. REFINANCING, RENEWAL, OR REFUNDING OF OBLIGATION OR CREDIT AGREEMENT. Redesignated from existing Section 1371.060. C.S.H.B. 3224 redesignates SECTION 12 (Section 1371.103 (b), Government Code) as SECTION 20 of the substitute, authorizing a governing body to secure and pay the cost of a credit agreement executed and delivered in connection with the financing of a project cost with the sources permitted by this chapter, and with ad valorem taxes to the extent the project cost relates to an eligible project for which there exists authorized but unissued obligations payable from ad valorem taxes. C.S.H.B. 3224 deletes SECTIONS 13-28 of the original which proposed the following amendments: SECTION 13. Amends Section 1431.001(2) and (3), Government Code, to redefine "governing body" to include a junior college district and an independent school district. SECTION 14. Amends Section 1431.002, Government Code, by adding new Subsections (c) and (d), as follows: (c) Authorizes the governing body of a junior college district by order or resolution to authorize the issuance of anticipation notes. (d) Authorizes the governing body of an independent school district by order to authorize the issuance of an anticipation note. SECTION 15. Amends Section 1431.003, Government Code, as follows: Sec. 1431.003. New title: ADDITIONAL AUTHORITY OF COUNTIES, JUNIOR COLLEGE DISTRICTS, AND CERTAIN MUNICIPALITIES AND INDEPENDENT SCHOOL DISTRICTS. Provides that this section applies only to an issuer that is a county, a junior college district, certain independent school districts, and a municipality with a population of 50,000 or more, rather than 80,000 or more. SECTION 16. Amends Section 1431.006(1), Government Code, to prohibit anticipation notes in this section issued by an issuer other than a county, rather than a municipality, from exceeding 75 percent of the revenue or taxes anticipated to be collected in that year. SECTION 17. Amends Section 1504.001, Government Code, and Subsections (3) and (4), to decrease the population bracket in this section from 1,500,000 or more to 450,000. SECTION 18. Amends Section 1504.003, Government Code, by adding a new Subsection (d), to authorize a municipality to pledge to the payment of bonds issued under this subchapter, alone or in combination with the revenue from the facility for which bonds are issued, hotel occupancy taxes that are pledged under and in accordance with the provisions of Section 351.102, Tax Code. SECTION 19. Amends Section 1504.008, Government Code, to authorize a bond issued under this subchapter to be signed in the manner provided in the ordinance, rather than by the mayor of the municipality and countersigned by the secretary or the clerk of the municipality. SECTION 20. Amends Section 1504.010, Government Code, to decrease the population bracket in this section from 1,500,000 or more to 450,000. Decreases the investment amount in this section from $20 million to $10 million to renovate. SECTION 21. Amends Section 1504.105 (b), Government Code, to make a nonsubstantive change. SECTION 22. Amends Section 1504.154(b), Government Code, to make a conforming change. SECTION 23. Amends Section 1504.157, Government Code, to make a conforming change. SECTION 24. Amends Section 1504.154(b), Government Code, to make a conforming change. SECTION 25. Amends Section 1504.251, Government Code, to provide that this subchapter applies only to a home-rule municipality with a population of bracket 450,000 or more, rather than 1,500,000 or more. SECTION 26. Amends Section 1504.243, Government Code, to authorize the governing body of a municipality by ordinance to issue revenue bonds to provide all or part of the money to effect any purpose, rather than to establish, acquire, construct, improve, equip, repair, operate, or maintain a cultural or parking facility, described by Section 1504.252. SECTION 27. Amends Section 1504.261, Government Code, to make a conforming change. SECTION 28. Repealer: (a) Chapter 1253; (b) Subchapter C, Chapter 1331; (c) Subchapter B, Chapter 1504; (d) Subchapter D, Chapter 1504; (e) Subchapter B, Chapter 1509; (f) Subchapter F, Chapter 1509. C.S.H.B. 3224 redesignates SECTION 29 (long emergency clause) of the original as SECTION 47 (short emergency clause) in the substitute. C.S.H.B. 3224 modifies the original by adding new SECTIONS 1-6, 8-12, 16-17, and 21-46. (With respect to these new sections, please see the Section By Section Analysis portion of this document.