Spotlight on Public Finance: Fall 2019

• Does the municipal issuer have any procedures in place to mitigate damages? • Does the municipal issuer have sufficient insurance coverage for any losses?

Unlike cybersecurity disclosure, a municipal issuer does not necessarily risk overexposure of information by providing disclosure about climate change; however, municipal issuers should be mindful of providing generic disclosures and instead focus on disclosure that is of particular relevance to the municipal issuer, taking into account its history and geographic location. Conclusion Cybersecurity and climate change are increasingly on the radar of not only investors, rating agencies, underwriters and but also the SEC. Further, certain rating agencies and underwriters have begun asking questions about cybersecurity and climate change during diligence reviews in connection with the issuance of municipal securities. The considerations presented in this article are a starting point for municipal issuers in approaching these issues. Bracewell’s team of experienced lawyers regularly provides guidance on disclosure and policies and procedures for municipal issuers. Should you desire additional information, please contact any member of our public finance team.

FEATURED ARTICLES Public Improvement Districts: An Economic Development Tool By Julie Melton Partain and Robert R. Collins III

Public Improvement Districts ( “PIDs”), which are created pursuant to Chapter 372, Texas Local Government Code (the “Act”), are a popular economic development tool in Texas. A PID allows a city or county to finance public improvements and provide services that benefit the property owners in a designated area within its boundaries or, in the case of a city in its extraterritorial jurisdiction, by levying assessments on property owners within such area. Most PIDs have been formed to facilitate residential housing development; however, in recent years, many PIDs have contained commercial development as a component of the residential development and, in some cases, cities have designated “commercial only” PIDs. PIDs are especially prevalent in the North Texas area, but their use is rapidly expanding across the State. Why a PID? Developer: For a developer, PID financing (especially bond financing) for all or a portion of the costs of public improvements reduces the amount of private capital needed for a development. Even a few million dollars of cash up front for the developer can make a very big difference in the financing and rate of return. Issuer: For a city or county issuer, there are several reasons why a PID financing is attractive. First, it can allow the issuer to achieve a higher standard of development than zoning alone would allow, which in turn can lead to higher home values. With a PID financing, the issuer has leverage to entice the developer to agree to a higher quality development in exchange for the upfront PID bond financing. Second, for certain troubled properties within a city or county, a PID bond financing may be a useful incentive to attract development that would not otherwise occur. Third, a PID financing places the payment obligation for an improvement only on the property owners benefitting directly from the improvement, as opposed to all citizens having to bear the cost of the improvements even if they don’t benefit directly. Finally, a PID is often more attractive to a city or county issuer than a municipal utility district or other water district within the issuer or its extraterritorial jurisdiction because a PID is merely a financing vehicle used by the issuer and the land within the PID remains under the issuer’s control. Formation In order to form a PID, the issuer must receive a petition from (i) the owners of taxable real property representing more than 50% of the appraised value of taxable real property liable for assessment in the proposed PID or (ii) the record owners of real property liable for assessment in the PID who constitute more than 50% of all record owners of property that is liable for assessment in the PID or own taxable real property that constitutes more than 50% of the area of all taxable real property that is liable for assessment in the PID. In reality, the majority of PIDs are formed when all the property within the proposed PID is owned by a single developer or landowner, but there some instances where a developer owns less than 50% of the property and can convince the owners of the remaining property to sign the petition prior to the developer’s purchase of the land. The issuer’s governing body must meet to “accept” the petition and call a public hearing on the creation of the PID. Notice of the public hearing must be published in

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