By: Carona, Shapiro S.B. No. 1350
A BILL TO BE ENTITLED
AN ACT
relating to the creation, administration, financing, and use of a
Texas Transportation Revolving Fund; granting the authority to
issue bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 222, Transportation Code, is amended by
adding Subchapter F to read as follows:
SUBCHAPTER F. TEXAS TRANSPORTATION REVOLVING FUND
Sec. 222.131. DEFINITIONS. In this subchapter:
(1) "Bonds" means bonds, notes, and other public
securities.
(2) "Credit agreement" has the meaning assigned by
Section 1371.001, Government Code.
(3) "Fund" means the Texas Transportation Revolving
Fund.
(4) "Fund revenue bonds" means bonds issued under
Section 222.135.
(5) "Highway improvement project" includes
acquisition of the highway, construction, reconstruction, and
major maintenance, including any necessary design, and the
acquisition of rights-of-way.
(6) "Transit provider" has the meaning assigned by
Section 370.003.
(7) "Transportation project" means a tolled or
nontolled highway improvement project.
Sec. 222.132. CREATION OF FUND. The Texas Transportation
Revolving Fund is created as a fund held in the Texas Treasury
Safekeeping Trust Company.
Sec. 222.133. ADMINISTRATION OF FUND. (a) The commission,
through the department, shall manage, invest, use, administer, and
provide financial assistance from the fund as provided by this
subchapter.
(b) The commission may create within the fund one or more
accounts or subaccounts as determined appropriate and necessary by
the commission.
(c) The commission shall prepare and file annually with the
governor, the lieutenant governor, and the Legislative Budget Board
a report providing information on the operation of the fund,
including:
(1) the amounts and sources of money deposited in the
fund during the year;
(2) investments and returns on investments of money in
the fund;
(3) loans made from the fund;
(4) other financial assistance provided from the fund;
(5) the status of any defaults on repayment of loans or
other financial assistance provided from the fund; and
(6) the details of any transportation project for
which financial assistance is received from the fund, including the
identity of any highway directly affected by the project, and the
degree to which the project is designed to reduce congestion,
improve traffic safety, and enhance connectivity.
Sec. 222.134. SOURCES OF MONEY DEPOSITED IN FUND. The
commission may deposit in the fund money derived from any source
available to the commission, including:
(1) if appropriated by the legislature for that
purpose:
(A) the proceeds of bonds issued under Section
222.003;
(B) the proceeds of bonds authorized by Section
49-p, Article III, Texas Constitution, if the law providing for the
issuance of the bonds does not prohibit the deposit of the proceeds
in the fund;
(C) money provided by the commission from the
state highway fund;
(D) money provided by the commission from the
Texas Mobility Fund that is in excess of the money required to be on
deposit in the Texas Mobility Fund by the proceedings authorizing
Texas Mobility Fund bonds and credit agreements; and
(E) other direct appropriations;
(2) repayments of principal and interest on loans made
under Section 222.137;
(3) the proceeds from the sale of loans under Section
222.140;
(4) the proceeds from the sale of fund revenue bonds;
and
(5) gifts and grants.
Sec. 222.135. FUND REVENUE BONDS. (a) The commission may
issue, sell, and deliver fund revenue bonds for the purpose of
providing money for the fund.
(b) Fund revenue bonds are special obligations of the
commission payable from the repayment of loans from the fund and
other money on deposit in the fund as the commission may designate.
(c) Fund revenue bonds do not constitute a debt of the state
or a pledge of the faith and credit of the state.
(d) The commission by order or resolution may issue fund
revenue bonds in the name and on behalf of the state and the
department and may enter into credit agreements related to the
bonds. The bonds may be issued in multiple series and issues from
time to time and may be issued on the terms and with the provisions
the commission determines appropriate and in the interests of the
state.
(e) The commission has all powers necessary or appropriate
to carry out this section, including the powers granted to other
bond-issuing governmental agencies and units and to nonprofit
corporations by Chapters 1201, 1207, and 1371, Government Code.
(f) Before the issuance of fund revenue bonds or credit
agreements, the commission shall submit the record of proceedings
of the commission authorizing the issuance, execution, and delivery
of the bonds or credit agreement and any contract providing revenue
or security to pay the bonds or credit agreement to the attorney
general for review. If the attorney general finds that the
proceedings authorizing a bond or credit agreement and any bonds
authorized in the proceedings conform to the requirements of the
Texas Constitution and this subchapter, the attorney general shall
approve the proceedings and the bonds and deliver to the
comptroller for registration a copy of the attorney general's legal
opinion stating that approval and the record of proceedings. After
approval, the bonds or credit agreement may be executed and
delivered, exchanged, or refinanced from time to time in accordance
with those authorizing proceedings.
(g) If the proceedings and any bonds authorized in the
proceedings are approved by the attorney general and registered by
the comptroller as provided above, the bonds or credit agreement,
as applicable, or a contract providing revenue or security included
in or executed and delivered according to the authorizing
proceedings are incontestable in a court or other forum and are
valid, binding, and enforceable according to their terms.
(h) The proceeds from the sale of fund revenue bonds may be
used to finance other funds or accounts relating to the bonds or
credit agreement, including a debt service reserve fund, and to pay
the costs of issuance. All remaining proceeds received from the
sale of the bonds shall be deposited in the fund and invested and
used as provided by this subchapter.
Sec. 222.136. INVESTMENT OF MONEY IN THE FUND. (a) Money
in the fund may be invested as provided by Chapter 2256, Government
Code, except that the proceeds of bonds deposited in the fund under
Section 222.134 shall be subject to any limitations contained in
the documents authorizing the issuance of the bonds.
(b) Income received from the investment of money in the fund
shall be deposited in the fund, subject to requirements that may be
imposed by the proceedings authorizing bonds issued to provide
money for deposit in the fund that are necessary to protect the
tax-exempt status of interest payable on the bonds in accordance
with applicable law of the United States concerning federal income
taxation of interest on the bonds. Investment income shall be
deposited in an account or subaccount in the fund as determined by
the department.
Sec. 222.137. USES OF MONEY IN THE FUND. (a) Except as
otherwise provided by this section, the commission may use money
held in the fund to provide financial assistance to a public entity,
including the department, for the costs of a transportation project
by:
(1) making loans, including through the purchase of
obligations of the public entity;
(2) providing liquidity or credit enhancement,
including through the agreement to loan to or purchase bonds,
notes, or other obligations from a public entity;
(3) serving as a reserve fund established in
connection with debt financing by the public entity;
(4) providing capitalized interest for debt financing
by the public entity; or
(5) providing a guarantee of the payment of the costs
of operations and maintenance of a transportation project.
(b) The proceeds of bonds authorized by Section 49-p,
Article III, Texas Constitution, or issued under Section 222.003
may only be used to provide financial assistance for highway
improvement projects, subject to any limitations provided by law.
(c) Money from the state highway fund may only be used for
the purposes for which revenues are dedicated under Section 7-a,
Article VIII, Texas Constitution.
(d) Money from the Texas Mobility Fund may only be used to
provide financial assistance for state highway improvement
projects, publicly owned toll roads, and public transportation
projects, whether on or off of the state highway system, subject to
any limitations provided by law.
(e) Money in the fund may be used to pay debt service on fund
revenue bonds.
(f) The commission may require the payment of reasonable
fees and other amounts by a public entity for all forms of financial
assistance provided under this section.
(g) The department shall monitor the use of financial
assistance provided to a public entity to ensure the financial
assistance is used for purposes authorized by law and may audit the
books and records of a public entity for this purpose.
Sec. 222.138. BORROWING FROM THE FUND BY PUBLIC ENTITY.
(a) A public entity, including a municipality, county, district,
authority, agency, department, board, or commission, that is
authorized by law to construct, maintain, or finance a
transportation project may borrow money from the fund, including by
direct loan or other financial assistance from the fund, and may
enter into any agreement relating to receiving financial assistance
from the fund.
(b) Money received by a public entity under this subchapter
must be segregated from other funds under the control of the public
entity and may only be used for purposes authorized by this
subchapter.
(c) To provide for the repayment of a loan or other
financial assistance, a public entity may:
(1) pledge revenues or income from any available
source;
(2) pledge, levy, and collect any taxes, subject to
any constitutional limitation; or
(3) pledge any combination of revenues, income, and
taxes.
(d) This section is wholly sufficient authority for a public
entity to borrow or otherwise obtain financial assistance from the
fund as authorized by this subchapter and to pledge revenues,
income, or taxes, or any combination of revenues, income, and
taxes, to the repayment of a loan or other financial assistance.
Sec. 222.139. REPAYMENT TERMS; DEPOSIT OF REPAYMENTS.
(a) For financial assistance that must be repaid, the commission
shall determine the terms and conditions of the repayment,
including the interest rates to be charged.
(b) The commission may require the entity receiving
financial assistance that must be repaid to make charges, levy and
collect taxes, pledge revenues, or otherwise take such action as
may be necessary to provide for money in an amount sufficient for
repayment according to the terms agreed on at the time the financial
assistance is provided.
(c) For a tolled highway improvement project, the
commission, in lieu of requiring the repayment of financial
assistance and any interest thereon, may require that revenues from
the project be shared between the entity and the department, and the
entity and the department may enter into an agreement specifying
the terms and conditions of the revenue sharing.
(d) The department shall deposit in the fund all amounts
received from repayment of the financial assistance or as a share of
revenues from a tolled highway improvement project.
Sec. 222.140. SALE OF LOANS. (a) As used in this section,
"loan" includes any financial assistance that must be repaid or any
portion of such assistance.
(b) The commission may sell any loans made from money in the
fund and shall deposit the proceeds of the sale in the fund.
(c) For any loans to be sold under this section, the
commission may submit to the attorney general for review and
approval the related financial assistance agreement, which shall,
for the purposes of Chapter 1202, Government Code, be considered to
be a public security, along with the record of proceedings of the
borrowing entity relating to the agreement. If the attorney
general approves the agreement, it shall be incontestable in a
court or other forum and is valid, binding, and enforceable
according to its terms as provided by Chapter 1202, Government
Code.
(d) The commission must sell the loans using a competitive
bidding process and at the price and under the terms and conditions
that it determines to be reasonable.
(e) As part of the sales agreement with the purchaser of a
loan, the commission may agree to perform the functions required to
enforce the conditions and requirements stated in the loans,
including the payment of debt service by the borrowing entity.
(f) The commission may exercise any powers necessary to
carry out the authority granted by this section, including the
authority to contract with any person to accomplish the purposes of
this section.
(g) The commission shall not be liable for the repayment of,
and may not repay, any loan sold under this section.
Sec. 222.141. WAIVER OF SOVEREIGN IMMUNITY. A public
entity receiving financial assistance under this subchapter and the
department may agree to waive sovereign immunity to suit for the
purpose of adjudicating a claim to enforce any of their obligations
brought by a party for breach of the terms of the financial
assistance agreement.
Sec. 222.142. IMPLEMENTATION BY RULE. (a) The commission
shall adopt rules to implement this subchapter, including rules:
(1) establishing eligibility and prioritization
criteria for entities applying for financial assistance from the
fund and for transportation projects that may receive financial
assistance from the fund;
(2) specifying the method for setting the terms and
conditions for providing financial assistance from the fund and for
the repayment of financial assistance from the fund; and
(3) establishing procedures for the sale of loans
originated from amounts on deposit in the fund.
(b) The eligibility and prioritization criteria described
in Subsection (a)(1) shall provide that financial assistance made
available for the delivery of a transportation project by the
department may not be in a larger amount or on more favorable terms
than the financial assistance requested and previously offered for
the delivery of that transportation project by a public entity, if
any.
(c) The commission shall appoint a rules advisory committee
to advise the department and the commission on the development of
the commission's initial rules required by this section. The
committee must include one or more members representing a local
toll project entity, as defined in Section 228.0111. Chapter 2110,
Government Code, does not apply to the committee. This subsection
expires on the date the commission adopts initial rules under this
section.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.