Texas 2019 - 86th Regular

Texas Senate Bill SB132 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Hinojosa, et al. S.B. No. 132
2		-	(Longoria, Guerra)
	1	+	By: Hinojosa, Lucio S.B. No. 132
3	2
4	3
5	4		A BILL TO BE ENTITLED
6	5		AN ACT
7	6		relating to operation of the Texas leverage fund program
8	7		administered by the Texas Economic Development Bank.
9	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	9		SECTION 1. Chapter 489, Government Code, is amended by
11	10		adding Subchapter E to read as follows:
12	11		SUBCHAPTER E. TEXAS LEVERAGE FUND
13	12		Sec. 489.251. DEFINITION. In this subchapter, "leverage
14	13		fund" means the Texas leverage fund established by Section 489.252.
15	14		Sec. 489.252. TEXAS LEVERAGE FUND. (a) The Texas leverage
16	15		fund is created as a trust fund held outside the state treasury by
17	16		the comptroller as trustee. The comptroller shall hold money in the
18	17		leverage fund in escrow and in trust for and on behalf of the bank
19	18		and the owners of bonds issued under Section 489.253.
20	19		(b) The leverage fund consists of:
21	20		(1) proceeds from the issuance of bonds under Section
22	21		489.253;
23	22		(2) payments of principal and interest on loans made
24	23		under this subchapter;
25	24		(3) loan origination fees imposed on loans made under
26	25		this subchapter;
27	26		(4) investment earnings described by Subsection (e);
28	27		and
29	28		(5) any other money received by the bank under this
30	29		subchapter.
31	30		(c) The leverage fund may be used only:
32	31		(1) to make loans to economic development corporations
33	32		for eligible projects as authorized by Chapters 501, 504, and 505,
34	33		Local Government Code;
35	34		(2) to pay the bank's necessary and reasonable costs of
36	35		administering the program established by this subchapter,
37	36		including the payment of letter of credit fees and credit rating
38	37		fees;
39	38		(3) to pay the principal of and interest on bonds
40	39		issued under Section 489.253;
41	40		(4) to pay reasonable fees and other costs incurred by
42	41		the bank in administering the leverage fund; and
43	42		(5) for any other purpose authorized by this
44	43		subchapter.
45	44		(d) The bank, in coordination with the comptroller, may
46	45		provide for the establishment and maintenance of separate accounts
47	46		or sub-accounts in the leverage fund, including interest and
48	47		sinking accounts, reserve accounts, program accounts, or other
49	48		accounts. The accounts and sub-accounts must be kept and held in
50	49		escrow and in trust as provided by Subsection (a).
51	50		(e) Pending use, the comptroller may invest and reinvest the
52	51		money in the leverage fund in investments authorized by law for
53	52		state funds. Earnings on the investments shall be credited to the
54	53		leverage fund.
55	54		(f) The bank may use money in the leverage fund for the
56	55		purposes specified by and according to the procedures established
57	56		by this subchapter. This state may take action with respect to the
58	57		leverage fund only as specified by this subchapter and only in
59	58		accordance with the resolutions of the executive director of the
60	59		office adopted under Section 489.253.
61	60		Sec. 489.253. REVENUE-BASED BONDS AUTHORIZED. (a) The
62	61		bank, the office, or the office's successor agency may provide for
63	62		the issuance, sale, and retirement of bonds, including obligations
64	63		in the form of commercial paper notes, to provide funding for
65	64		economic development purposes as authorized by Section 52-a,
66	65		Article III, Texas Constitution, and this subchapter.
67	66		(b) The bonds are special obligations of the bank and the
68	67		principal of and interest on the bonds must be payable solely from
69	68		the revenues derived by the bank under this subchapter, including
70	69		loan repayments secured by a pledge of the local economic
71	70		development sales and use tax revenues imposed by municipalities
72	71		for the benefit of economic development corporations created under
73	72		Chapters 504 and 505, Local Government Code. The bonds do not
74	73		constitute an indebtedness of this state, the office, or the bank in
75	74		the meaning of the Texas Constitution or of any statutory
76	75		limitation. The bonds do not constitute a pecuniary liability of
77	76		this state, the office, or the bank or constitute a charge against
78	77		the general credit of this state, the office, or the bank, or
79	78		against the taxing power of this state. The limitations provided by
80	79		this subsection must be stated plainly on the face of each bond.
81	80		(c) The executive director of the office by resolution may
82	81		provide for the bonds to:
83	82		(1) be executed and delivered at any time in one or
84	83		more series as a single issue or as several issues;
85	84		(2) be in any denomination and form, including
86	85		registered uncertificated bonds not represented by written
87	86		instruments and commonly known as book-entry obligations, the
88	87		registration of ownership and transfer of which the bank shall
89	88		provide for under a system of books and records maintained by a
90	89		financial institution serving as trustee, paying agent, or bond
91	90		registrar;
92	91		(3) be of a term authorized by the executive director,
93	92		not to exceed 40 years from their date;
94	93		(4) be in coupon or registered form;
95	94		(5) be payable in installments and at a time or times
96	95		not exceeding the term authorized by applicable law;
97	96		(6) be subject to terms of redemption;
98	97		(7) be payable at a place or places;
99	98		(8) bear no interest or bear interest at any rate or
100	99		rates, fixed, variable, floating, or otherwise determined by the
101	100		bank or determined under a contractual arrangement approved by the
102	101		executive director, except that the maximum net effective interest
103	102		rate, computed in accordance with Section 1204.005, on the bonds
104	103		may not exceed a rate equal to the maximum annual interest rate
105	104		established by Section 1204.006; and
106	105		(9) contain provisions not inconsistent with this
107	106		subchapter.
108	107		(d) Bonds issued under this section are subject to review
109	108		and approval by the attorney general in the same manner and with the
110	109		same effect as may be required by law, including Chapter 1202 or
111	110		1371, as applicable.
112	111		(e) This state pledges to and agrees with the owners of any
113	112		bonds issued under this section that this state will not limit or
114	113		alter the rights vested in the bank to fulfill the terms of any
115	114		agreements made with an owner or in any way impair the rights and
116	115		remedies of an owner until the bonds, together with any premium and
117	116		the interest on the bonds, with interest on any unpaid premium or
118	117		installments of interest, and all costs and expenses in connection
119	118		with any action or proceeding by or on behalf of the owners, are
120	119		fully met and discharged. The bank may include this pledge and
121	120		agreement of this state in any agreement with the owners of the
122	121		bonds.
123	122		Sec. 489.254. BOND SALE AND ISSUANCE. (a) Bonds issued
124	123		under Section 489.253 may be sold at public or private sale at a
125	124		price and in a manner and from time to time as resolutions of the
126	125		executive director of the office that authorize issuance of the
127	126		bonds provide.
128	127		(b) From the proceeds of the sale of the bonds, the bank may
129	128		pay expenses, premiums, and insurance premiums that the bank
130	129		considers necessary or advantageous in connection with the
131	130		authorization, sale, and issuance of the bonds.
132	131		(c) In connection with the issuance of its bonds, the bank
133	132		may exercise the powers granted to the governing body of an issuer
134	133		in connection with the issuance of obligations under Chapter 1371.
135	134		However, any bonds issued in accordance with this subchapter and
136	135		Chapter 1371 are not subject to the rating requirement for an
137	136		obligation issued under Chapter 1371.
138	137		Sec. 489.255. AGREEMENTS IN BONDS. (a) A resolution of
139	138		the executive director of the office that authorizes bonds to be
140	139		issued under Section 489.253 or a security agreement, including a
141	140		related indenture or trust indenture, may contain any agreements
142	141		and provisions customarily contained in instruments securing
143	142		bonds, including provisions respecting the fixing and collection of
144	143		obligations, the creation and maintenance of special funds, and the
145	144		rights and remedies available, in the event of default to the
146	145		holders of the bonds or to the trustee under the security agreement,
147	146		all as the bank considers advisable and consistent with this
148	147		subchapter. However, in making such an agreement or provision, the
149	148		bank may not incur:
150	149		(1) a pecuniary liability of this state, the office,
151	150		or the bank; or
152	151		(2) a charge against the general credit of this state,
153	152		the office, or the bank, or against the taxing powers of this state.
154	153		(b) The resolution of the executive director of the office
155	154		authorizing the issuance of the bonds and a security agreement
156	155		securing the bonds may provide that, in the event of default in
157	156		payment of the principal of or interest on the bonds or in the
158	157		performance of an agreement contained in the proceedings or
159	158		security agreement, the payment and performance may be enforced as
160	159		provided by Sections 403.055 and 403.0551, by mandamus, or by the
161	160		appointment of a receiver in equity with power to charge and collect
162	161		bonds and to apply revenues pledged according to the proceedings or
163	162		the provisions of the security agreement. A security agreement may
164	163		provide that, in the event of default in payment or the violation of
165	164		an agreement contained in the security agreement, a trustee under
166	165		the security agreement may enforce the bondholder's rights by
167	166		mandamus or other proceedings at law or in equity to obtain any
168	167		relief permitted by law, including the right to collect and receive
169	168		any revenue used to secure the bonds.
170	169		(c) A breach of a resolution of the executive director of
171	170		the office adopted under Section 489.253, a breach of an agreement
172	171		made under this section, or a default under bonds issued under this
173	172		subchapter does not constitute:
174	173		(1) a pecuniary liability of this state, the office,
175	174		or the bank; or
176	175		(2) a charge against the general credit of this state,
177	176		the office, or the bank, or against the taxing power of this state.
178	177		(d) The trustee or trustees under a security agreement or a
179	178		depository specified by the security agreement may be any person
180	179		that the bank designates, regardless of whether the person is a
181	180		resident of this state or incorporated under the laws of the United
182	181		States or any state.
183	182		Sec. 489.256. REFUNDING BONDS. (a) Bonds issued under
184	183		Section 489.253 may be refunded by the bank by the issuance of the
185	184		bank's refunding bonds in the amount that the bank considers
186	185		necessary to refund the unpaid principal of the refunded bonds,
187	186		together with any unpaid interest, premiums, expenses, and
188	187		commissions required to be paid in connection with the refunded
189	188		bonds. Refunding may be effected whether the refunded bonds have
190	189		matured or are to mature later, either by sale of the refunding
191	190		bonds or by exchange of the refunding bonds for the refunded bonds.
192	191		(b) A holder of refunded bonds may not be compelled to
193	192		surrender the bonds for payment or exchange before the date on which
194	193		the bonds are payable, or, if the bonds are called for redemption,
195	194		before the date on which they are by their terms subject to
196	195		redemption.
197	196		(c) Refunding bonds having a final maturity not to exceed
198	197		that permitted for other bonds issued under Section 489.253 may be
199	198		issued under the same terms and conditions provided by this
200	199		subchapter for the issuance of bonds or may be issued in the manner
201	200		provided by statute, including Chapters 1207 and 1371.
202	201		Sec. 489.257. USE OF BOND PROCEEDS. The proceeds from the
203	202		sale of bonds issued under this subchapter may be applied only for a
204	203		purpose for which the bonds were issued, except that:
205	204		(1) any secured interest received in the sale shall be
206	205		applied to the payment of the principal of or interest on the bonds
207	206		sold and, if a portion of the proceeds is not needed for a purpose
208	207		for which the bonds were issued, that portion shall be applied to
209	208		the payment of the principal of or interest on the bonds; and
210	209		(2) any premium received in the sale of the bonds shall
211	210		be applied in accordance with Section 1201.042(d).
212	211		Sec. 489.258. BONDS AS LEGAL INVESTMENTS FOR FIDUCIARIES
213	212		AND OTHER PERSONS. (a) Bonds of the bank issued under this
214	213		subchapter are securities in which all public officers and bodies
215	214		of this state; municipalities; municipal subdivisions; insurance
216	215		companies and associations and other persons carrying on an
217	216		insurance business; banks, bankers, trust companies, savings and
218	217		loan associations, investment companies, and other persons
219	218		carrying on a banking business; administrators, guardians,
220	219		executors, trustees, and other fiduciaries; and other persons
221	220		authorized to invest in other obligations of this state may invest
222	221		funds, including capital, in their control or belonging to them.
223	222		(b) Notwithstanding any other provision of law, the bonds of
224	223		the bank issued under this subchapter are also securities that may
225	224		be deposited with and received by public officers and bodies of this
226	225		state and municipalities and municipal subdivisions for any purpose
227	226		for which the deposit of other obligations of the state are
228	227		authorized.
229	228		Sec. 489.259. ADMINISTRATION OF LEVERAGE FUND. The bank
230	229		shall administer the leverage fund. In administering the leverage
231	230		fund and this subchapter, the bank has the powers necessary to carry
232	231		out the purposes of this subchapter, including the power to:
233	232		(1) make, execute, and deliver contracts,
234	233		conveyances, and other instruments; and
235	234		(2) impose charges and provide for reasonable
236	235		penalties for delinquent payments or performance in connection with
237	236		any transaction.
238	237		SECTION 2. Section 501.008, Local Government Code, is
239	238		amended to read as follows:
240	239		Sec. 501.008. LIMITATION ON FINANCIAL OBLIGATION.
241	240		(a) Except as provided by Subsection (b), a [A] corporation may
242	241		not incur a financial obligation that cannot be paid from:
243	242		(1) bond proceeds;
244	243		(2) revenue realized from the lease or sale of a
245	244		project;
246	245		(3) revenue realized from a loan made by the
247	246		corporation to wholly or partly finance or refinance a project; or
248	247		(4) money granted under a contract with a municipality
249	248		under Section 380.002.
250	249		(b) A Type A or Type B corporation may obtain a loan from the
251	250		Texas leverage fund program under Subchapter E, Chapter 489,
252	251		Government Code, for eligible projects as authorized by this
253	252		subtitle. To secure the loan, the Type A or Type B corporation may
254	253		pledge revenue from the sales and use tax imposed by the
255	254		corporation's authorizing municipality under Chapter 504 or 505, as
256	255		applicable, for the benefit of the corporation.
257	256		SECTION 3. The Texas leverage fund program as amended by
258	257		this Act authorizes the continued operation of the program that was
259	258		established by the September 9, 1992, master resolution of the
260	259		Texas Department of Commerce under Chapter 4 (S.B. 223), Acts of the
261	260		71st Legislature, Regular Session, 1989 (codifying authority of the
262	261		former Texas Department of Commerce to issue revenue bonds under
263	262		former Sections 481.052 through 481.058, Government Code), as
264	263		amended by Chapter 1041 (S.B. 932), Acts of the 75th Legislature,
265	264		Regular Session, 1997, and by Chapter 814 (S.B. 275), Acts of the
266	265		78th Legislature, Regular Session, 2003.
267	266		SECTION 4. (a) Except as provided by Subsection (b) of
268	267		this section, the governmental acts and proceedings of the
269	268		comptroller, the Texas Economic Development and Tourism Office, and
270	269		the Texas Economic Development Bank relating to the administration
271	270		of the Texas leverage fund program that occurred before the
272	271		effective date of this Act are validated as if the acts had occurred
273	272		as authorized by law.
274	273		(b) This section does not validate:
275	274		(1) an act that, under the law of this state at the
276	275		time the act occurred, was a misdemeanor or felony; or
277	276		(2) a matter that on the effective date of this Act:
278	277		(A) is involved in litigation if the litigation
279	278		ultimately results in the matter being held invalid by a final
280	279		judgment of a court; or
281	280		(B) has been held invalid by a final judgment of a
282	281		court.
283	282		SECTION 5. The comptroller of public accounts is required
284	283		to implement a provision of this Act only if the legislature
285	284		appropriates money specifically for that purpose. If the
286	285		legislature does not appropriate money specifically for that
287	286		purpose, the comptroller may, but is not required to, implement a
288	287		provision of this Act using other appropriations available for that
289	288		purpose.
290	289		SECTION 6. The Texas Economic Development and Tourism
291	290		Office is required to implement a provision of this Act only if the
292	291		legislature appropriates money specifically for that purpose. If
293	292		the legislature does not appropriate money specifically for that
294	293		purpose, the office may, but is not required to, implement a
295	294		provision of this Act using other appropriations available for that
296	295		purpose.
297	296		SECTION 7. The Texas Economic Development Bank is required
298	297		to implement a provision of this Act only if the legislature
299	298		appropriates money specifically for that purpose. If the
300	299		legislature does not appropriate money specifically for that
301	300		purpose, the bank may, but is not required to, implement a provision
302	301		of this Act using other appropriations available for that purpose.
303	302		SECTION 8. The attorney general is required to implement a
304	303		provision of this Act only if the legislature appropriates money
305	304		specifically for that purpose. If the legislature does not
306	305		appropriate money specifically for that purpose, the attorney
307	306		general may, but is not required to, implement a provision of this
308	307		Act using other appropriations available for that purpose.
309	308		SECTION 9. This Act takes effect immediately if it receives
310	309		a vote of two-thirds of all the members elected to each house, as
311	310		provided by Section 39, Article III, Texas Constitution. If this
312	311		Act does not receive the vote necessary for immediate effect, this
313	312		Act takes effect September 1, 2019.