By: Hinojosa S.B. No. 1632
(In the Senate - Filed March 8, 2013; March 20, 2013, read
first time and referred to Committee on Transportation;
May 10, 2013, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 5, Nays 3; May 10, 2013,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1632 By: Campbell
A BILL TO BE ENTITLED
AN ACT
relating to the financing of transportation projects; authorizing
fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 222.071, Transportation Code, is amended
to read as follows:
Sec. 222.071. DEFINITIONS. In this subchapter:
(1) "Bank" means the state infrastructure bank
account.
(2) "Credit agreement" has the meaning assigned by
Section 1371.001, Government Code ["Construction" has the meaning
assigned by 23 U.S.C. Section 101].
(3) "Federal act" means Section 350 of the National
Highway System Designation Act of 1995 (Pub. L. No. 104-59),
relating to the state infrastructure bank pilot program or the
state infrastructure bank program (23 U.S.C. Section 610), as
applicable.
(4) "Financial assistance" means a direct loan or
other assistance described by Section 222.074(a) ["Federal-aid
highway" has the meaning assigned by 23 U.S.C. Section 101].
(5) "Qualified project" includes:
(A) a public roadway project [the construction of
a federal-aid highway];
(B) a transportation project of a port authority
or navigation district created or operating under Section 52,
Article III, or Section 59, Article XVI, Texas Constitution;
(C) a freight rail project;
(D) an infrastructure project relating to an
intracoastal waterway;
(E) [a transit project under 49 U.S.C. Sections
5307, 5309, and 5311; or
[(C)] for the expenditure of secondary funds from
an account subject to Section 350 of the National Highway System
Designation Act of 1995 (Pub. L. No. 104-59), a project eligible for
assistance under Title 23 or Title 49, United States Code; or
(F) for the expenditure of money subject to the
federal act, a public roadway or public transit project.
(6) "Secondary funds" includes:
(A) the payment or repayment of a loan or other
assistance that is provided with money deposited to the credit of
the bank; and
(B) investment income generated by secondary
funds deposited to the credit of the bank.
SECTION 2. Section 222.072, Transportation Code, is amended
by amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) The commission may deposit in the bank:
(1) federal [Federal] funds received by the state
under the federal act;
(2) [,] matching state funds in an amount required by
the federal [that] act;
(3) funds appropriated by the legislature for that
purpose;
(4) a payment or repayment of principal and interest
on a loan made under Section 222.074;
(5) proceeds from the sale of loans under Section
222.078;
(6) [,] proceeds from bonds issued under Section
222.075;
(7) [,] secondary funds;
(8) a gift or grant;
(9) fees paid to the bank; and
(10) investment earnings on the money on[, other state
funds deposited into the bank by order of the commission, and other
money received by the state that is eligible for] deposit in the
bank [may be deposited into the bank and used only for the purposes
described in this subchapter].
(c) Not later than January 31 of each year, the department
shall prepare and file with the governor, the lieutenant governor,
the Legislative Budget Board, and each standing committee of the
legislature with primary responsibility over transportation and
state finance a report that provides information on the operation
of the bank, including:
(1) investments and returns on investments of money in
the bank during the previous fiscal year;
(2) loans made from the bank during the previous
fiscal year;
(3) other financial assistance provided from the bank
during the previous fiscal year;
(4) the status of any defaults on repayment of loans or
on repayment of debt service paid from the bank; and
(5) the status of any uncompleted qualified project
for which a guarantee was provided from the bank during the previous
fiscal year.
SECTION 3. Section 222.073, Transportation Code, is amended
to read as follows:
Sec. 222.073. PURPOSES OF INFRASTRUCTURE BANK. The
[Notwithstanding Section 222.001, the] commission shall use money
deposited in the bank to:
(1) encourage public and private investment in
transportation facilities both within and outside of the state
highway system, including facilities that contribute to the
multimodal and intermodal transportation capabilities of the
state; [and]
(2) develop or expand transportation in the state; and
(3) develop financing techniques designed to:
(A) expand the availability of funding for
transportation projects and to reduce direct state costs;
(B) maximize private and local participation in
financing projects; and
(C) improve the efficiency of the state
transportation system.
SECTION 4. Section 222.074, Transportation Code, is amended
by amending Subsection (a) and adding Subsections (d), (e), and (f)
to read as follows:
(a) To further a purpose described by Section 222.073, the
commission may use money deposited to the credit of the bank to
provide financial assistance to a public [or private] entity,
including the department, for a qualified project to:
(1) extend credit by direct loan, including by
purchasing a bond or other obligation of a public entity;
(2) provide credit enhancements;
(3) serve as a capital reserve for bond or debt
instrument financing;
(4) subsidize interest rates;
(5) insure the issuance of a letter of credit or credit
instrument;
(6) finance a purchase or lease agreement in
connection with a transit project;
(7) provide security for bonds and other debt
instruments; [or]
(8) provide capitalized interest for debt financing by
a public entity;
(9) pay the cost of issuing a bond or other debt
instrument; or
(10) for money subject to the federal act, provide
methods of leveraging money that have been approved by the United
States secretary of transportation and relate to the project for
which the assistance is provided.
(d) The commission may require a public entity that requests
financial assistance from the bank to pay an application fee and
other reasonable amounts in connection with the request. The
department shall deposit revenue collected under this subsection:
(1) to the credit of the state highway fund to
reimburse the department for administrative costs relating to the
bank that were originally charged to the state highway fund; or
(2) in the subaccount in the bank from which the
financial assistance is requested.
(e) The department shall monitor the use of financial
assistance provided to a public entity to ensure that the
assistance is used for a purpose authorized by the financial
assistance agreement. The department may audit a book or record of
a public entity for that purpose.
(f) Financial assistance made available under this
subchapter for the delivery of a qualified project by the
department may not, taking into account any differing forms of the
offered assistance, be in a larger amount or on more favorable terms
than the financial assistance previously requested and offered for
the delivery of that project by a public entity other than the
department, if such a request and offer were made. The commission
shall adopt rules to implement an analysis required to comply with
this subsection.
SECTION 5. Section 222.0745, Transportation Code, is
amended to read as follows:
Sec. 222.0745. INCURRENCE OF DEBT BY PUBLIC ENTITY. (a) A
public entity in this state, including a municipality, county,
district, authority, agency, department, board, or commission,
that is authorized by law to construct, maintain, [or] finance, or
refinance a qualified project, or a transportation corporation or
local government corporation created under Chapter 431 and acting
on behalf of a public entity, may:
(1) borrow money from the bank, including by direct
loan or through another form of financial assistance; and
(2) enter into an agreement that relates to receiving
financial assistance from the bank[, based on the credit of the
public entity].
(b) Money received by a public entity under this subchapter
[borrowed under this section] must be segregated from other funds
under the control of the public entity and may only be used for
purposes authorized by the financial assistance agreement [related
to a qualified project].
(c) To provide for the payment or repayment of a loan or
another form of financial assistance provided under this
subchapter, a public entity may:
(1) pledge revenue or income from any available
source;
(2) pledge, impose, or collect a tax that the entity is
otherwise authorized to impose; or
(3) pledge any combination of revenue, income, or
taxes.
(d) This section is wholly sufficient authority for a public
entity to:
(1) borrow or otherwise obtain a form of financial
assistance from the bank as authorized by this subchapter; and
(2) pledge revenue, income, or taxes or any
combination of revenue, income, or taxes for the payment or
repayment of a loan or another form of financial assistance from the
bank.
(e) If under any constitutional limitation a public entity
must obtain voter approval to impose a tax to secure the payment or
repayment of any financial assistance provided under this
subchapter, the public entity may call an election for that
purpose.
(f) The authority granted by this section does not affect
the ability of a public entity to incur debt using other statutorily
authorized methods.
SECTION 6. Subsections (b), (f), (i), and (j), Section
222.075, Transportation Code, are amended to read as follows:
(b) Except as provided by Subsection (c), the commission
may:
(1) issue revenue bonds or revenue refunding bonds
under this section without complying with any other law applicable
to the issuance of bonds; and
(2) enter into a credit agreement related to the
bonds.
(f) The commission may require an entity [participants] to
[make charges, levy taxes, or otherwise] provide for sufficient
money to pay or repay financial assistance provided from the bank,
including any [pay] acquired obligations.
(i) Before the commission issues revenue bonds or enters
into a credit agreement under this section, the commission shall
submit a record of the [All] proceedings of the commission that
authorize [relating to] the issuance, execution, and delivery of
the [revenue] bonds or credit agreement and any contract that
provides revenue or security to pay the bonds or credit agreement
[issued under this section shall be submitted] to the attorney
general for review [examination]. If the attorney general finds
that the proceedings authorizing the bonds or credit agreement and
any bonds authorized by the proceedings conform to the requirements
prescribed by the Texas Constitution and this subchapter [On
determining that the revenue bonds have been authorized in
accordance with law], the attorney general shall approve the
proceedings and [revenue] bonds, and shall deliver to [the revenue
bonds shall be registered by] the comptroller for registration a
copy of the attorney general's legal opinion relating to the
approval and a record of the proceedings. After approval by the
attorney general, the bonds or credit agreement may be executed and
delivered, exchanged, or refinanced in accordance with the
authorization proceedings. After the approval and registration,
the [revenue] bonds, credit agreement, or contract providing
revenue or security included in or executed and delivered according
to the authorization proceedings are incontestable in any court or
other forum for any reason and are valid, [and] binding, and
enforceable [obligations] in accordance with their terms for all
purposes.
(j) The commission may use proceeds from the sale of revenue
bonds to finance other funds or accounts relating to the bonds or
credit agreement, including a debt service reserve fund, and to pay
the cost of issuing the bonds. Any remaining [The] proceeds
received from the sale of the [revenue] bonds shall be deposited in
the bank and invested and used in the manner provided for other
funds deposited under this subchapter.
SECTION 7. Section 222.076, Transportation Code, is amended
to read as follows:
Sec. 222.076. SEPARATE SUBACCOUNTS. (a) The bank shall
consist of at least two separate subaccounts, a highway subaccount
and a transit subaccount. The commission may create additional
subaccounts that are capitalized with federal funds or with a
combination of federal funds and state funds.
(b) In addition to the subaccounts under Subsection (a), the
commission shall [may] create one subaccount that is, and may
create [or] more subaccounts that are, capitalized with state funds
only. Subaccounts capitalized with state funds only are not
subject to the federal act.
SECTION 8. Section 222.077, Transportation Code, is amended
by amending Subsections (a) and (b) and adding Subsection (a-1) to
read as follows:
(a) If a form of financial assistance [Any funds disbursed
through the state infrastructure bank] must be paid or repaid, [on
terms determined by] the commission shall determine the terms of
the payment or repayment, including the interest rate to be
charged, and enter into a financial assistance agreement with the
public entity receiving the assistance specifying the terms of the
payment or repayment. The terms must comply with the federal act
except for terms applicable to funds deposited in a subaccount
described by Section 222.076(b).
(a-1) For a tolled highway improvement project, the
commission may require that revenue from the project be shared
between an entity and the department.
(b) Notwithstanding any other law to the contrary:
(1) the payment or repayment of a loan or other
assistance provided with money deposited to the credit of a
subaccount in the bank, including all amounts received as a share of
revenue from a tolled highway improvement project, shall be
deposited in that subaccount; and
(2) investment income generated by money deposited to
the credit of a subaccount in the bank shall be:
(A) credited to that subaccount, subject to any
requirement imposed by a proceeding that authorizes bonds to be
issued to provide money for deposit in the bank that is necessary to
protect the tax-exempt status of interest payable on the bonds in
accordance with applicable federal law;
(B) available for use in providing financial
assistance under this subchapter; and
(C) invested as authorized by Chapter 2256,
Government Code, but money in the bank subject to the federal act
shall be invested in United States Treasury securities, [bank]
deposits in financial institutions, or other financing instruments
approved by the United States secretary of transportation to earn
interest and enhance the financing of projects assisted by the
bank, and proceeds from bonds deposited in the bank under Section
222.072 are subject to any limitations contained in a document that
authorizes the issuance of the bonds.
SECTION 9. Subchapter D, Chapter 222, Transportation Code,
is amended by adding Section 222.078 to read as follows:
Sec. 222.078. SALE OF LOANS. (a) In this section, "loan"
means any financial assistance provided under this subchapter that
must be repaid, including financial assistance repaid through
revenue sharing.
(b) The commission may direct the department to sell, in
accordance with this section, any loan made from money in the bank.
The department by rule must establish a competitive bidding process
for a sale conducted under this section.
(c) For a loan made to a public entity, the department shall
provide to the public entity written notice of the department's
intent to sell the loan. The notice must be provided not later than
the 90th day preceding the date established under rules of the
commission on which the process required for the sale under
Subsection (b) begins.
(d) The department may not sell a loan made to a public
entity if:
(1) prepayment of the principal of and accrued
interest due on the loan is tendered under Subsection (f); or
(2) the public entity prohibits the sale under
Subsection (g).
(e) The department may not sell a loan that was made to a
public entity for a tolled highway improvement project before the
later of:
(1) the date of the completion of the project's
construction;
(2) the date the loan is completely funded; or
(3) the earlier of:
(A) the date the project's forecasted
stabilization and ramp-up is achieved based on an investment grade
traffic and revenue study; or
(B) the sixth anniversary of the date the project
fully opened for tolled operations.
(f) The department must accept the prepayment of principal
of and accrued interest due on a loan in accordance with the
financial assistance agreement or, in the absence of prescribed
terms in the financial assistance agreement regarding prepayment,
on terms that the commission determines to be reasonable.
(g) If the terms of the financial assistance agreement
prohibit a public entity from prepaying its loan at the time of a
proposed sale of the loan under this section, the public entity may
prohibit the sale of the loan, in which event the department and the
public entity shall renegotiate the prepayment terms in the
financial assistance agreement to allow for prepayment of the loan
at the time of the proposed sale. The prohibition under this
subsection terminates on the date an agreement on the renegotiated
prepayment terms is executed.
(h) For any loan made to a public entity to be sold under
this section, the commission may submit to the attorney general for
review and approval the related financial assistance agreement
together with the record of proceedings of the public entity
relating to the agreement. For the purposes of Chapter 1202,
Government Code, the financial assistance agreement is considered
to be a public security. If the attorney general finds that the
financial assistance agreement has been authorized to be issued in
conformity with law, the attorney general shall approve the
agreement and deliver to the comptroller a copy of the attorney
general's legal opinion stating that approval and the record of
proceedings. Following approval by the attorney general, the
financial assistance agreement is incontestable in a court or other
forum and is valid, binding, and enforceable according to its terms
as provided by Chapter 1202, Government Code.
(i) As part of the sales agreement with the purchaser of a
loan, the department may agree to perform the functions required to
enforce the conditions and requirements stated in the loan,
including enforcing the payment of debt service by the borrowing
entity.
(j) The department shall deposit the proceeds of the sale of
a loan under this section in the bank.
(k) The commission and department 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.
(l) The state, the department, and the commission are not
liable for the repayment of any loan sold under this section and
neither may repay a loan sold under this section.
SECTION 10. 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, 2013.
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