Texas 2013 - 83rd Regular

Texas Senate Bill SB1632 Compare Versions

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1	1	By: Hinojosa S.B. No. 1632
2	2	(In the Senate - Filed March 8, 2013; March 20, 2013, read
3	3	first time and referred to Committee on Transportation;
4	4	May 10, 2013, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 5, Nays 3; May 10, 2013,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 1632 By: Campbell
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to the financing of transportation projects; authorizing
13	13	fees.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. Section 222.071, Transportation Code, is amended
16	16	to read as follows:
17	17	Sec. 222.071. DEFINITIONS. In this subchapter:
18	18	(1) "Bank" means the state infrastructure bank
19	19	account.
20	20	(2) "Credit agreement" has the meaning assigned by
21	21	Section 1371.001, Government Code ["Construction" has the meaning
22	22	assigned by 23 U.S.C. Section 101].
23	23	(3) "Federal act" means Section 350 of the National
24	24	Highway System Designation Act of 1995 (Pub. L. No. 104-59),
25	25	relating to the state infrastructure bank pilot program or the
26	26	state infrastructure bank program (23 U.S.C. Section 610), as
27	27	applicable.
28	28	(4) "Financial assistance" means a direct loan or
29	29	other assistance described by Section 222.074(a) ["Federal-aid
30	30	highway" has the meaning assigned by 23 U.S.C. Section 101].
31	31	(5) "Qualified project" includes:
32	32	(A) a public roadway project [the construction of
33	33	a federal-aid highway];
34	34	(B) a transportation project of a port authority
35	35	or navigation district created or operating under Section 52,
36	36	Article III, or Section 59, Article XVI, Texas Constitution;
37	37	(C) a freight rail project;
38	38	(D) an infrastructure project relating to an
39	39	intracoastal waterway;
40	40	(E) [a transit project under 49 U.S.C. Sections
41	41	5307, 5309, and 5311; or
42	42	[(C)] for the expenditure of secondary funds from
43	43	an account subject to Section 350 of the National Highway System
44	44	Designation Act of 1995 (Pub. L. No. 104-59), a project eligible for
45	45	assistance under Title 23 or Title 49, United States Code; or
46	46	(F) for the expenditure of money subject to the
47	47	federal act, a public roadway or public transit project.
48	48	(6) "Secondary funds" includes:
49	49	(A) the payment or repayment of a loan or other
50	50	assistance that is provided with money deposited to the credit of
51	51	the bank; and
52	52	(B) investment income generated by secondary
53	53	funds deposited to the credit of the bank.
54	54	SECTION 2. Section 222.072, Transportation Code, is amended
55	55	by amending Subsection (b) and adding Subsection (c) to read as
56	56	follows:
57	57	(b) The commission may deposit in the bank:
58	58	(1) federal [Federal] funds received by the state
59	59	under the federal act;
60	60	(2) [,] matching state funds in an amount required by
61	61	the federal [that] act;
62	62	(3) funds appropriated by the legislature for that
63	63	purpose;
64	64	(4) a payment or repayment of principal and interest
65	65	on a loan made under Section 222.074;
66	66	(5) proceeds from the sale of loans under Section
67	67	222.078;
68	68	(6) [,] proceeds from bonds issued under Section
69	69	222.075;
70	70	(7) [,] secondary funds;
71	71	(8) a gift or grant;
72	72	(9) fees paid to the bank; and
73	73	(10) investment earnings on the money on[, other state
74	74	funds deposited into the bank by order of the commission, and other
75	75	money received by the state that is eligible for] deposit in the
76	76	bank [may be deposited into the bank and used only for the purposes
77	77	described in this subchapter].
78	78	(c) Not later than January 31 of each year, the department
79	79	shall prepare and file with the governor, the lieutenant governor,
80	80	the Legislative Budget Board, and each standing committee of the
81	81	legislature with primary responsibility over transportation and
82	82	state finance a report that provides information on the operation
83	83	of the bank, including:
84	84	(1) investments and returns on investments of money in
85	85	the bank during the previous fiscal year;
86	86	(2) loans made from the bank during the previous
87	87	fiscal year;
88	88	(3) other financial assistance provided from the bank
89	89	during the previous fiscal year;
90	90	(4) the status of any defaults on repayment of loans or
91	91	on repayment of debt service paid from the bank; and
92	92	(5) the status of any uncompleted qualified project
93	93	for which a guarantee was provided from the bank during the previous
94	94	fiscal year.
95	95	SECTION 3. Section 222.073, Transportation Code, is amended
96	96	to read as follows:
97	97	Sec. 222.073. PURPOSES OF INFRASTRUCTURE BANK. The
98	98	[Notwithstanding Section 222.001, the] commission shall use money
99	99	deposited in the bank to:
100	100	(1) encourage public and private investment in
101	101	transportation facilities both within and outside of the state
102	102	highway system, including facilities that contribute to the
103	103	multimodal and intermodal transportation capabilities of the
104	104	state; [and]
105	105	(2) develop or expand transportation in the state; and
106	106	(3) develop financing techniques designed to:
107	107	(A) expand the availability of funding for
108	108	transportation projects and to reduce direct state costs;
109	109	(B) maximize private and local participation in
110	110	financing projects; and
111	111	(C) improve the efficiency of the state
112	112	transportation system.
113	113	SECTION 4. Section 222.074, Transportation Code, is amended
114	114	by amending Subsection (a) and adding Subsections (d), (e), and (f)
115	115	to read as follows:
116	116	(a) To further a purpose described by Section 222.073, the
117	117	commission may use money deposited to the credit of the bank to
118	118	provide financial assistance to a public [or private] entity,
119	119	including the department, for a qualified project to:
120	120	(1) extend credit by direct loan, including by
121	121	purchasing a bond or other obligation of a public entity;
122	122	(2) provide credit enhancements;
123	123	(3) serve as a capital reserve for bond or debt
124	124	instrument financing;
125	125	(4) subsidize interest rates;
126	126	(5) insure the issuance of a letter of credit or credit
127	127	instrument;
128	128	(6) finance a purchase or lease agreement in
129	129	connection with a transit project;
130	130	(7) provide security for bonds and other debt
131	131	instruments; [or]
132	132	(8) provide capitalized interest for debt financing by
133	133	a public entity;
134	134	(9) pay the cost of issuing a bond or other debt
135	135	instrument; or
136	136	(10) for money subject to the federal act, provide
137	137	methods of leveraging money that have been approved by the United
138	138	States secretary of transportation and relate to the project for
139	139	which the assistance is provided.
140	140	(d) The commission may require a public entity that requests
141	141	financial assistance from the bank to pay an application fee and
142	142	other reasonable amounts in connection with the request. The
143	143	department shall deposit revenue collected under this subsection:
144	144	(1) to the credit of the state highway fund to
145	145	reimburse the department for administrative costs relating to the
146	146	bank that were originally charged to the state highway fund; or
147	147	(2) in the subaccount in the bank from which the
148	148	financial assistance is requested.
149	149	(e) The department shall monitor the use of financial
150	150	assistance provided to a public entity to ensure that the
151	151	assistance is used for a purpose authorized by the financial
152	152	assistance agreement. The department may audit a book or record of
153	153	a public entity for that purpose.
154	154	(f) Financial assistance made available under this
155	155	subchapter for the delivery of a qualified project by the
156	156	department may not, taking into account any differing forms of the
157	157	offered assistance, be in a larger amount or on more favorable terms
158	158	than the financial assistance previously requested and offered for
159	159	the delivery of that project by a public entity other than the
160	160	department, if such a request and offer were made. The commission
161	161	shall adopt rules to implement an analysis required to comply with
162	162	this subsection.
163	163	SECTION 5. Section 222.0745, Transportation Code, is
164	164	amended to read as follows:
165	165	Sec. 222.0745. INCURRENCE OF DEBT BY PUBLIC ENTITY. (a) A
166	166	public entity in this state, including a municipality, county,
167	167	district, authority, agency, department, board, or commission,
168	168	that is authorized by law to construct, maintain, [or] finance, or
169	169	refinance a qualified project, or a transportation corporation or
170	170	local government corporation created under Chapter 431 and acting
171	171	on behalf of a public entity, may:
172	172	(1) borrow money from the bank, including by direct
173	173	loan or through another form of financial assistance; and
174	174	(2) enter into an agreement that relates to receiving
175	175	financial assistance from the bank[, based on the credit of the
176	176	public entity].
177	177	(b) Money received by a public entity under this subchapter
178	178	[borrowed under this section] must be segregated from other funds
179	179	under the control of the public entity and may only be used for
180	180	purposes authorized by the financial assistance agreement [related
181	181	to a qualified project].
182	182	(c) To provide for the payment or repayment of a loan or
183	183	another form of financial assistance provided under this
184	184	subchapter, a public entity may:
185	185	(1) pledge revenue or income from any available
186	186	source;
187	187	(2) pledge, impose, or collect a tax that the entity is
188	188	otherwise authorized to impose; or
189	189	(3) pledge any combination of revenue, income, or
190	190	taxes.
191	191	(d) This section is wholly sufficient authority for a public
192	192	entity to:
193	193	(1) borrow or otherwise obtain a form of financial
194	194	assistance from the bank as authorized by this subchapter; and
195	195	(2) pledge revenue, income, or taxes or any
196	196	combination of revenue, income, or taxes for the payment or
197	197	repayment of a loan or another form of financial assistance from the
198	198	bank.
199	199	(e) If under any constitutional limitation a public entity
200	200	must obtain voter approval to impose a tax to secure the payment or
201	201	repayment of any financial assistance provided under this
202	202	subchapter, the public entity may call an election for that
203	203	purpose.
204	204	(f) The authority granted by this section does not affect
205	205	the ability of a public entity to incur debt using other statutorily
206	206	authorized methods.
207	207	SECTION 6. Subsections (b), (f), (i), and (j), Section
208	208	222.075, Transportation Code, are amended to read as follows:
209	209	(b) Except as provided by Subsection (c), the commission
210	210	may:
211	211	(1) issue revenue bonds or revenue refunding bonds
212	212	under this section without complying with any other law applicable
213	213	to the issuance of bonds; and
214	214	(2) enter into a credit agreement related to the
215	215	bonds.
216	216	(f) The commission may require an entity [participants] to
217	217	[make charges, levy taxes, or otherwise] provide for sufficient
218	218	money to pay or repay financial assistance provided from the bank,
219	219	including any [pay] acquired obligations.
220	220	(i) Before the commission issues revenue bonds or enters
221	221	into a credit agreement under this section, the commission shall
222	222	submit a record of the [All] proceedings of the commission that
223	223	authorize [relating to] the issuance, execution, and delivery of
224	224	the [revenue] bonds or credit agreement and any contract that
225	225	provides revenue or security to pay the bonds or credit agreement
226	226	[issued under this section shall be submitted] to the attorney
227	227	general for review [examination]. If the attorney general finds
228	228	that the proceedings authorizing the bonds or credit agreement and
229	229	any bonds authorized by the proceedings conform to the requirements
230	230	prescribed by the Texas Constitution and this subchapter [On
231	231	determining that the revenue bonds have been authorized in
232	232	accordance with law], the attorney general shall approve the
233	233	proceedings and [revenue] bonds, and shall deliver to [the revenue
234	234	bonds shall be registered by] the comptroller for registration a
235	235	copy of the attorney general's legal opinion relating to the
236	236	approval and a record of the proceedings. After approval by the
237	237	attorney general, the bonds or credit agreement may be executed and
238	238	delivered, exchanged, or refinanced in accordance with the
239	239	authorization proceedings. After the approval and registration,
240	240	the [revenue] bonds, credit agreement, or contract providing
241	241	revenue or security included in or executed and delivered according
242	242	to the authorization proceedings are incontestable in any court or
243	243	other forum for any reason and are valid, [and] binding, and
244	244	enforceable [obligations] in accordance with their terms for all
245	245	purposes.
246	246	(j) The commission may use proceeds from the sale of revenue
247	247	bonds to finance other funds or accounts relating to the bonds or
248	248	credit agreement, including a debt service reserve fund, and to pay
249	249	the cost of issuing the bonds. Any remaining [The] proceeds
250	250	received from the sale of the [revenue] bonds shall be deposited in
251	251	the bank and invested and used in the manner provided for other
252	252	funds deposited under this subchapter.
253	253	SECTION 7. Section 222.076, Transportation Code, is amended
254	254	to read as follows:
255	255	Sec. 222.076. SEPARATE SUBACCOUNTS. (a) The bank shall
256	256	consist of at least two separate subaccounts, a highway subaccount
257	257	and a transit subaccount. The commission may create additional
258	258	subaccounts that are capitalized with federal funds or with a
259	259	combination of federal funds and state funds.
260	260	(b) In addition to the subaccounts under Subsection (a), the
261	261	commission shall [may] create one subaccount that is, and may
262	262	create [or] more subaccounts that are, capitalized with state funds
263	263	only. Subaccounts capitalized with state funds only are not
264	264	subject to the federal act.
265	265	SECTION 8. Section 222.077, Transportation Code, is amended
266	266	by amending Subsections (a) and (b) and adding Subsection (a-1) to
267	267	read as follows:
268	268	(a) If a form of financial assistance [Any funds disbursed
269	269	through the state infrastructure bank] must be paid or repaid, [on
270	270	terms determined by] the commission shall determine the terms of
271	271	the payment or repayment, including the interest rate to be
272	272	charged, and enter into a financial assistance agreement with the
273	273	public entity receiving the assistance specifying the terms of the
274	274	payment or repayment. The terms must comply with the federal act
275	275	except for terms applicable to funds deposited in a subaccount
276	276	described by Section 222.076(b).
277	277	(a-1) For a tolled highway improvement project, the
278	278	commission may require that revenue from the project be shared
279	279	between an entity and the department.
280	280	(b) Notwithstanding any other law to the contrary:
281	281	(1) the payment or repayment of a loan or other
282	282	assistance provided with money deposited to the credit of a
283	283	subaccount in the bank, including all amounts received as a share of
284	284	revenue from a tolled highway improvement project, shall be
285	285	deposited in that subaccount; and
286	286	(2) investment income generated by money deposited to
287	287	the credit of a subaccount in the bank shall be:
288	288	(A) credited to that subaccount, subject to any
289	289	requirement imposed by a proceeding that authorizes bonds to be
290	290	issued to provide money for deposit in the bank that is necessary to
291	291	protect the tax-exempt status of interest payable on the bonds in
292	292	accordance with applicable federal law;
293	293	(B) available for use in providing financial
294	294	assistance under this subchapter; and
295	295	(C) invested as authorized by Chapter 2256,
296	296	Government Code, but money in the bank subject to the federal act
297	297	shall be invested in United States Treasury securities, [bank]
298	298	deposits in financial institutions, or other financing instruments
299	299	approved by the United States secretary of transportation to earn
300	300	interest and enhance the financing of projects assisted by the
301	301	bank, and proceeds from bonds deposited in the bank under Section
302	302	222.072 are subject to any limitations contained in a document that
303	303	authorizes the issuance of the bonds.
304	304	SECTION 9. Subchapter D, Chapter 222, Transportation Code,
305	305	is amended by adding Section 222.078 to read as follows:
306	306	Sec. 222.078. SALE OF LOANS. (a) In this section, "loan"
307	307	means any financial assistance provided under this subchapter that
308	308	must be repaid, including financial assistance repaid through
309	309	revenue sharing.
310	310	(b) The commission may direct the department to sell, in
311	311	accordance with this section, any loan made from money in the bank.
312	312	The department by rule must establish a competitive bidding process
313	313	for a sale conducted under this section.
314	314	(c) For a loan made to a public entity, the department shall
315	315	provide to the public entity written notice of the department's
316	316	intent to sell the loan. The notice must be provided not later than
317	317	the 90th day preceding the date established under rules of the
318	318	commission on which the process required for the sale under
319	319	Subsection (b) begins.
320	320	(d) The department may not sell a loan made to a public
321	321	entity if:
322	322	(1) prepayment of the principal of and accrued
323	323	interest due on the loan is tendered under Subsection (f); or
324	324	(2) the public entity prohibits the sale under
325	325	Subsection (g).
326	326	(e) The department may not sell a loan that was made to a
327	327	public entity for a tolled highway improvement project before the
328	328	later of:
329	329	(1) the date of the completion of the project's
330	330	construction;
331	331	(2) the date the loan is completely funded; or
332	332	(3) the earlier of:
333	333	(A) the date the project's forecasted
334	334	stabilization and ramp-up is achieved based on an investment grade
335	335	traffic and revenue study; or
336	336	(B) the sixth anniversary of the date the project
337	337	fully opened for tolled operations.
338	338	(f) The department must accept the prepayment of principal
339	339	of and accrued interest due on a loan in accordance with the
340	340	financial assistance agreement or, in the absence of prescribed
341	341	terms in the financial assistance agreement regarding prepayment,
342	342	on terms that the commission determines to be reasonable.
343	343	(g) If the terms of the financial assistance agreement
344	344	prohibit a public entity from prepaying its loan at the time of a
345	345	proposed sale of the loan under this section, the public entity may
346	346	prohibit the sale of the loan, in which event the department and the
347	347	public entity shall renegotiate the prepayment terms in the
348	348	financial assistance agreement to allow for prepayment of the loan
349	349	at the time of the proposed sale. The prohibition under this
350	350	subsection terminates on the date an agreement on the renegotiated
351	351	prepayment terms is executed.
352	352	(h) For any loan made to a public entity to be sold under
353	353	this section, the commission may submit to the attorney general for
354	354	review and approval the related financial assistance agreement
355	355	together with the record of proceedings of the public entity
356	356	relating to the agreement. For the purposes of Chapter 1202,
357	357	Government Code, the financial assistance agreement is considered
358	358	to be a public security. If the attorney general finds that the
359	359	financial assistance agreement has been authorized to be issued in
360	360	conformity with law, the attorney general shall approve the
361	361	agreement and deliver to the comptroller a copy of the attorney
362	362	general's legal opinion stating that approval and the record of
363	363	proceedings. Following approval by the attorney general, the
364	364	financial assistance agreement is incontestable in a court or other
365	365	forum and is valid, binding, and enforceable according to its terms
366	366	as provided by Chapter 1202, Government Code.
367	367	(i) As part of the sales agreement with the purchaser of a
368	368	loan, the department may agree to perform the functions required to
369	369	enforce the conditions and requirements stated in the loan,
370	370	including enforcing the payment of debt service by the borrowing
371	371	entity.
372	372	(j) The department shall deposit the proceeds of the sale of
373	373	a loan under this section in the bank.
374	374	(k) The commission and department may exercise any powers
375	375	necessary to carry out the authority granted by this section,
376	376	including the authority to contract with any person to accomplish
377	377	the purposes of this section.
378	378	(l) The state, the department, and the commission are not
379	379	liable for the repayment of any loan sold under this section and
380	380	neither may repay a loan sold under this section.
381	381	SECTION 10. This Act takes effect immediately if it
382	382	receives a vote of two-thirds of all the members elected to each
383	383	house, as provided by Section 39, Article III, Texas Constitution.
384	384	If this Act does not receive the vote necessary for immediate
385	385	effect, this Act takes effect September 1, 2013.
386	386	* * * * *