December 17, 2008
To All Bond Counsel:
Re: Proposed Public Improvement District Guidelines; Public Finance Division Personnel; Proposed Public Finance Division Rules
1. Proposed Public Improvement District Guidelines. Efforts to finance improvements in public improvement districts (“PIDs”) implicate a number of currently unsettled legal and/or administrative issues. The Public Finance Division receives numerous inquiries from bond counsel each year regarding the validity of proposed PID financing structures. We believe that the development of a more comprehensive framework for considering PID financings would help issuers and bond counsel avoid unnecessary delays in or uncertainty regarding the legal requirements for the issuance of PID bonds.
Attached as Exhibit A are proposed guidelines regarding the issuance of PID bonds under Subchapter A, Chapter 372, Texas Government Code (the “Act”). In developing the proposed guidelines, we engaged in extensive discussions with bond counsel firms that frequently represent issuers of PID bonds. While additional legislation may be necessary to achieve some of the goals expressed by bond counsel, we believe the proposed guidelines address most of the issues raised in the course of our discussions.
Our goal is to develop guidelines that will provide a workable platform for the structuring and review of future PID financings within the parameters of the Act. As a result, prior to formally adopting the guidelines we would like to give all interested parties an opportunity to provide written comments as to the positions expressed in the proposed guidelines. Please submit any written comments to the Public Finance Division no later than January 19, 2009. Comments should be addressed to the attention of Stephanie Leibe.
2. Public Finance Division Personnel. Thank you for your support during my tenure in the Public Finance Division. It was a pleasure to have the opportunity to work with the members of the Texas bond community and the outstanding lawyers in the Public Finance Division. Effective December 1, I assumed the duties of Deputy Attorney General for Legal Counsel. I look forward to serving you in this new role.
Tom Griess has graciously agreed to serve as the acting Chief of the Public Finance Division. Tom has been with the Public Finance Division for seventeen years, and during that time he has demonstrated an unparalleled knowledge of state public finance law. A gifted teacher, his service will be an asset to the Texas bond community. Please join me in welcoming him to this new position.
3. Proposed Public Finance Division Rules. Our office remains committed to maintaining an open dialog with the bond community, and your input is a critical element in our efforts to ensure that we efficiently and effectively fulfill our statutory duties. In addition to the proposed PID guidelines being distributed today, the Public Finance Division recently began the process of revising Title 1, Chapter 53 of the Texas Administrative Code. Proposed revisions to Subchapter A of Chapter 53 were distributed to interested parties for informal comment on November 26, 2008. Proposed revisions to other subchapters will follow in the coming months. To the extent you have any suggestions regarding the proposed PID guidelines or rules, we hope you will take the opportunity to submit comments.
Thank you for your cooperation in distributing this information to your colleagues.
Very truly yours,
Jonathan K. Frels
POST OFFICE BOX 12548, AUSTIN, TEXAS 78711-2548 TEL: (512) 463-2100 WEB: WWW.OAG.STATE.TX.US