Texas 2021 - 87th Regular

Texas House Bill HB4119 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~87R19927~~ CLG-D
	1	+	87R7141 CLG-D
2	2		By: Guillen H.B. No. 4119
3		-	Substitute the following for H.B. No. 4119:
4		-	By: Button C.S.H.B. No. 4119
5	3
6	4
7	5		A BILL TO BE ENTITLED
8	6		AN ACT
9	7		relating to operation of the Texas small and rural community
10	8		success fund program administered by the Texas Economic Development
11	9		Bank as successor to the Texas leverage fund program.
12	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	11		SECTION 1. Chapter 489, Government Code, is amended by
14	12		adding Subchapter E to read as follows:
15	13		SUBCHAPTER E. TEXAS SMALL AND RURAL COMMUNITY SUCCESS FUND
16	14		Sec. 489.251. DEFINITION. In this subchapter, "fund" means
17	15		the Texas small and rural community success fund established by
18	16		Section 489.252.
19	17		Sec. 489.252. TEXAS SMALL AND RURAL COMMUNITY SUCCESS FUND.
20	18		(a) The Texas small and rural community success fund is created as
21	19		a trust fund held outside the state treasury by the comptroller as
22	20		trustee. The comptroller shall hold money in the fund in escrow and
23	21		in trust for and on behalf of the bank and the owners of bonds issued
24	22		under Section 489.253.
25	23		(b) The fund consists of:
26	24		(1) proceeds from the issuance of bonds under Section
27	25		489.253;
28	26		(2) payments of principal and interest on loans made
29	27		under this subchapter;
30	28		(3) loan origination fees imposed on loans made under
31	29		this subchapter;
32	30		(4) investment earnings described by Subsection (e);
33	31		and
34	32		(5) any other money received by the bank under this
35	33		subchapter.
36	34		(c) The fund may be used only:
37	35		(1) to make loans to economic development corporations
38	36		for eligible projects as authorized by Chapters 501, 504, and 505,
39	37		Local Government Code;
40	38		(2) to pay the bank's necessary and reasonable costs of
41	39		administering the program established by this subchapter,
42	40		including the payment of letter of credit fees and credit rating
43	41		fees;
44	42		(3) to pay the principal of and interest on bonds
45	43		issued under Section 489.253;
46	44		(4) to pay reasonable fees and other costs incurred by
47	45		the bank in administering the fund; and
48	46		(5) for any other purpose authorized by this
49	47		subchapter.
50	48		(d) The bank, in coordination with the comptroller, may
51	49		provide for the establishment and maintenance of separate accounts
52	50		or sub-accounts in the fund, including interest and sinking
53	51		accounts, reserve accounts, program accounts, or other accounts.
54	52		The accounts and sub-accounts must be kept and held in escrow and in
55	53		trust as provided by Subsection (a).
56	54		(e) Pending use, the comptroller may invest and reinvest the
57	55		money in the fund in investments authorized by law for state funds.
58	56		Earnings on the investments shall be credited to the fund.
59	57		(f) The bank may use money in the fund for the purposes
60	58		specified by and according to the procedures established by this
61	59		subchapter. This state may take action with respect to the fund
62	60		only as specified by this subchapter and only in accordance with the
63	61		resolutions of the executive director of the office adopted under
64	62		Section 489.253.
65	63		Sec. 489.253. REVENUE-BASED BONDS AUTHORIZED. (a) The
66	64		bank, the office, or the office's successor agency may provide for
67	65		the issuance, sale, and retirement of bonds, including obligations
68	66		in the form of commercial paper notes, to provide funding for
69	67		economic development purposes as authorized by Section 52-a,
70	68		Article III, Texas Constitution, and this subchapter.
71	69		(b) The bonds are special obligations of the bank and the
72	70		principal of and interest on the bonds must be payable solely from
73	71		the revenues derived by the bank under this subchapter, including
74	72		loan repayments secured by a pledge of the local economic
75	73		development sales and use tax revenues imposed by municipalities
76	74		for the benefit of economic development corporations created under
77	75		Chapters 504 and 505, Local Government Code. The bonds do not
78	76		constitute an indebtedness of this state, the office, or the bank in
79	77		the meaning of the Texas Constitution or of any statutory
80	78		limitation. The bonds do not constitute a pecuniary liability of
81	79		this state, the office, or the bank or constitute a charge against
82	80		the general credit of this state, the office, or the bank, or
83	81		against the taxing power of this state. The limitations provided by
84	82		this subsection must be stated plainly on the face of each bond.
85	83		(c) The executive director of the office by resolution may
86	84		provide for the bonds to:
87	85		(1) be executed and delivered at any time in one or
88	86		more series as a single issue or as several issues;
89	87		(2) be in any denomination and form, including
90	88		registered uncertificated bonds not represented by written
91	89		instruments and commonly known as book-entry obligations, the
92	90		registration of ownership and transfer of which the bank shall
93	91		provide for under a system of books and records maintained by a
94	92		financial institution serving as trustee, paying agent, or bond
95	93		registrar;
96	94		(3) be of a term authorized by the executive director,
97	95		not to exceed 40 years from their date;
98	96		(4) be in coupon or registered form;
99	97		(5) be payable in installments and at a time or times
100	98		not exceeding the term authorized by applicable law;
101	99		(6) be subject to terms of redemption;
102	100		(7) be payable at a place or places;
103	101		(8) bear no interest or bear interest at any rate or
104	102		rates, fixed, variable, floating, or otherwise determined by the
105	103		bank or determined under a contractual arrangement approved by the
106	104		executive director, except that the maximum net effective interest
107	105		rate, computed in accordance with Section 1204.005, on the bonds
108	106		may not exceed a rate equal to the maximum annual interest rate
109	107		established by Section 1204.006; and
110	108		(9) contain provisions not inconsistent with this
111	109		subchapter.
112	110		(d) Bonds issued under this section are subject to review
113	111		and approval by the attorney general in the same manner and with the
114	112		same effect as may be required by law, including Chapter 1202 or
115	113		1371, as applicable.
116	114		(e) This state pledges to and agrees with the owners of any
117	115		bonds issued under this section that this state will not limit or
118	116		alter the rights vested in the bank to fulfill the terms of any
119	117		agreements made with an owner or in any way impair the rights and
120	118		remedies of an owner until the bonds, together with any premium and
121	119		the interest on the bonds, with interest on any unpaid premium or
122	120		installments of interest, and all costs and expenses in connection
123	121		with any action or proceeding by or on behalf of the owners, are
124	122		fully met and discharged. The bank may include this pledge and
125	123		agreement of this state in any agreement with the owners of the
126	124		bonds.
127	125		Sec. 489.254. BOND SALE AND ISSUANCE. (a) Bonds issued
128	126		under Section 489.253 may be sold at public or private sale at a
129	127		price and in a manner and from time to time as resolutions of the
130	128		executive director of the office that authorize issuance of the
131	129		bonds provide.
132	130		(b) From the proceeds of the sale of the bonds, the bank may
133	131		pay expenses, premiums, and insurance premiums that the bank
134	132		considers necessary or advantageous in connection with the
135	133		authorization, sale, and issuance of the bonds.
136	134		(c) In connection with the issuance of its bonds, the bank
137	135		may exercise the powers granted to the governing body of an issuer
138	136		in connection with the issuance of obligations under Chapter 1371.
139	137		However, any bonds issued in accordance with this subchapter and
140	138		Chapter 1371 are not subject to the rating requirement for an
141	139		obligation issued under Chapter 1371.
142	140		Sec. 489.255. AGREEMENTS IN BONDS. (a) A resolution of the
143	141		executive director of the office that authorizes bonds to be issued
144	142		under Section 489.253 or a security agreement, including a related
145	143		indenture or trust indenture, may contain any agreements and
146	144		provisions customarily contained in instruments securing bonds,
147	145		including provisions respecting the fixing and collection of
148	146		obligations, the creation and maintenance of special funds, and the
149	147		rights and remedies available, in the event of default to the
150	148		holders of the bonds or to the trustee under the security agreement,
151	149		all as the bank considers advisable and consistent with this
152	150		subchapter. However, in making such an agreement or provision, the
153	151		bank may not incur:
154	152		(1) a pecuniary liability of this state, the office,
155	153		or the bank; or
156	154		(2) a charge against the general credit of this state,
157	155		the office, or the bank, or against the taxing powers of this state.
158	156		(b) The resolution of the executive director of the office
159	157		authorizing the issuance of the bonds and a security agreement
160	158		securing the bonds may provide that, in the event of default in
161	159		payment of the principal of or interest on the bonds or in the
162	160		performance of an agreement contained in the proceedings or
163	161		security agreement, the payment and performance may be enforced as
164	162		provided by Sections 403.055 and 403.0551, by mandamus, or by the
165	163		appointment of a receiver in equity with power to charge and collect
166	164		bonds and to apply revenues pledged according to the proceedings or
167	165		the provisions of the security agreement. A security agreement may
168	166		provide that, in the event of default in payment or the violation of
169	167		an agreement contained in the security agreement, a trustee under
170	168		the security agreement may enforce the bondholder's rights by
171	169		mandamus or other proceedings at law or in equity to obtain any
172	170		relief permitted by law, including the right to collect and receive
173	171		any revenue used to secure the bonds.
174	172		(c) A breach of a resolution of the executive director of
175	173		the office adopted under Section 489.253, a breach of an agreement
176	174		made under this section, or a default under bonds issued under this
177	175		subchapter does not constitute:
178	176		(1) a pecuniary liability of this state, the office,
179	177		or the bank; or
180	178		(2) a charge against the general credit of this state,
181	179		the office, or the bank, or against the taxing power of this state.
182	180		(d) The trustee or trustees under a security agreement or a
183	181		depository specified by the security agreement may be any person
184	182		that the bank designates, regardless of whether the person is a
185	183		resident of this state or incorporated under the laws of the United
186	184		States or any state.
187	185		Sec. 489.256. REFUNDING BONDS. (a) Bonds issued under
188	186		Section 489.253 may be refunded by the bank by the issuance of the
189	187		bank's refunding bonds in the amount that the bank considers
190	188		necessary to refund the unpaid principal of the refunded bonds,
191	189		together with any unpaid interest, premiums, expenses, and
192	190		commissions required to be paid in connection with the refunded
193	191		bonds. Refunding may be effected whether the refunded bonds have
194	192		matured or are to mature later, either by sale of the refunding
195	193		bonds or by exchange of the refunding bonds for the refunded bonds.
196	194		(b) A holder of refunded bonds may not be compelled to
197	195		surrender the bonds for payment or exchange before the date on which
198	196		the bonds are payable, or, if the bonds are called for redemption,
199	197		before the date on which they are by their terms subject to
200	198		redemption.
201	199		(c) Refunding bonds having a final maturity not to exceed
202	200		that permitted for other bonds issued under Section 489.253 may be
203	201		issued under the same terms and conditions provided by this
204	202		subchapter for the issuance of bonds or may be issued in the manner
205	203		provided by statute, including Chapters 1207 and 1371.
206	204		Sec. 489.257. USE OF BOND PROCEEDS. The proceeds from the
207	205		sale of bonds issued under this subchapter may be applied only for a
208	206		purpose for which the bonds were issued, except that:
209	207		(1) any secured interest received in the sale shall be
210	208		applied to the payment of the principal of or interest on the bonds
211	209		sold and, if a portion of the proceeds is not needed for a purpose
212	210		for which the bonds were issued, that portion shall be applied to
213	211		the payment of the principal of or interest on the bonds; and
214	212		(2) any premium received in the sale of the bonds shall
215	213		be applied in accordance with Section 1201.042(d).
216	214		Sec. 489.258. BONDS AS LEGAL INVESTMENTS FOR FIDUCIARIES
217	215		AND OTHER PERSONS. (a) Bonds of the bank issued under this
218	216		subchapter are securities in which all public officers and bodies
219	217		of this state; municipalities; municipal subdivisions; insurance
220	218		companies and associations and other persons carrying on an
221	219		insurance business; banks, bankers, trust companies, savings and
222	220		loan associations, investment companies, and other persons
223	221		carrying on a banking business; administrators, guardians,
224	222		executors, trustees, and other fiduciaries; and other persons
225	223		authorized to invest in other obligations of this state may invest
226	224		funds, including capital, in their control or belonging to them.
227	225		(b) Notwithstanding any other provision of law, the bonds of
228	226		the bank issued under this subchapter are also securities that may
229	227		be deposited with and received by public officers and bodies of this
230	228		state and municipalities and municipal subdivisions for any purpose
231	229		for which the deposit of other obligations of the state are
232	230		authorized.
233	231		Sec. 489.259. ADMINISTRATION OF FUND. The bank shall
234	232		administer the fund. In administering the fund and this
235	233		subchapter, the bank has the powers necessary to carry out the
236	234		purposes of this subchapter, including the power to:
237	235		(1) make, execute, and deliver contracts,
238	236		conveyances, and other instruments; and
239	237		(2) impose charges and provide for reasonable
240	238		penalties for delinquent payments or performance in connection with
241	239		any transaction.
242	240		SECTION 2. Section 501.008, Local Government Code, is
243	241		amended to read as follows:
244	242		Sec. 501.008. LIMITATION ON FINANCIAL OBLIGATION. (a)
245	243		Except as provided by Subsection (b), a [A] corporation may not
246	244		incur a financial obligation that cannot be paid from:
247	245		(1) bond proceeds;
248	246		(2) revenue realized from the lease or sale of a
249	247		project;
250	248		(3) revenue realized from a loan made by the
251	249		corporation to wholly or partly finance or refinance a project; or
252	250		(4) money granted under a contract with a municipality
253	251		under Section 380.002.
254	252		(b) A Type A or Type B corporation may obtain a loan from the
255	253		Texas small and rural community success fund program under
256	254		Subchapter E, Chapter 489, Government Code, for eligible projects
257	255		as authorized by this subtitle. To secure the loan, the Type A or
258	256		Type B corporation may pledge revenue from the sales and use tax
259	257		imposed by the corporation's authorizing municipality under
260	258		Chapter 504 or 505, as applicable, for the benefit of the
261	259		corporation.
262		-	SECTION 3. The Texas small and rural community success fund
	260	+	SECTION 3. Subchapter C, Chapter 501, Local Government
	261	+	Code, is amended by adding Sections 501.108 and 501.109 to read as
	262	+	follows:
	263	+	Sec. 501.108. PROJECTS RELATED TO BROADBAND NETWORK
	264	+	INFRASTRUCTURE EXPANSION. In this subtitle, "project" includes the
	265	+	land, equipment, expenditures, and improvements that are found by
	266	+	the board of directors to be suitable for the expansion of broadband
	267	+	network infrastructure.
	268	+	Sec. 501.109. PROJECTS RELATED TO ASSISTANCE FOR SMALL
	269	+	BUSINESSES AFFECTED BY DECLARED DISASTER. (a) For the purposes of
	270	+	Subsection (b), "small business" means a corporation, partnership,
	271	+	sole proprietorship, or other legal entity that:
	272	+	(1) is formed for the purpose of making a profit;
	273	+	(2) is independently owned and operated; and
	274	+	(3) has fewer than 100 employees residing in this
	275	+	state.
	276	+	(b) In this subtitle, "project" includes expenditures that
	277	+	are found by the board of directors to be suitable to assist the
	278	+	economic recovery of small businesses whose operation was
	279	+	restricted by an order, proclamation, or regulation issued by the
	280	+	governor or the governing body of a political subdivision during a
	281	+	declared state of disaster under Chapter 418, Government Code.
	282	+	SECTION 4. The Texas small and rural community success fund
263	283		program authorizes the continued operation, under a new name and
264	284		with new provisions, as added by this Act, of the Texas leverage
265	285		fund program that was established by the September 9, 1992, master
266	286		resolution of the Texas Department of Commerce under Chapter 4
267	287		(S.B. 223), Acts of the 71st Legislature, Regular Session, 1989
268	288		(codifying authority of the former Texas Department of Commerce to
269	289		issue revenue bonds under former Sections 481.052 through 481.058,
270	290		Government Code), as amended by Chapter 1041 (S.B. 932), Acts of the
271	291		75th Legislature, Regular Session, 1997, and by Chapter 814 (S.B.
272	292		275), Acts of the 78th Legislature, Regular Session, 2003.
273		-	SECTION 4. (a) Except as provided by Subsection (b) of this
	293	+	SECTION 5. (a) Except as provided by Subsection (b) of this
274	294		section, the governmental acts and proceedings of the comptroller,
275	295		the Texas Economic Development and Tourism Office, and the Texas
276	296		Economic Development Bank relating to the administration of the
277	297		Texas leverage fund program that occurred before the effective date
278	298		of this Act are validated as if the acts had occurred as authorized
279	299		by law.
280	300		(b) This section does not validate:
281	301		(1) an act that, under the law of this state at the
282	302		time the act occurred, was a misdemeanor or felony; or
283	303		(2) a matter that on the effective date of this Act:
284	304		(A) is involved in litigation if the litigation
285	305		ultimately results in the matter being held invalid by a final
286	306		judgment of a court; or
287	307		(B) has been held invalid by a final judgment of a
288	308		court.
289		-	SECTION 5. The comptroller of public accounts is required
	309	+	SECTION 6. The comptroller of public accounts is required
290	310		to implement a provision of this Act only if the legislature
291	311		appropriates money specifically for that purpose. If the
292	312		legislature does not appropriate money specifically for that
293	313		purpose, the comptroller may, but is not required to, implement a
294	314		provision of this Act using other appropriations available for that
295	315		purpose.
296		-	SECTION 6. The Texas Economic Development and Tourism
	316	+	SECTION 7. The Texas Economic Development and Tourism
297	317		Office is required to implement a provision of this Act only if the
298	318		legislature appropriates money specifically for that purpose. If
299	319		the legislature does not appropriate money specifically for that
300	320		purpose, the office may, but is not required to, implement a
301	321		provision of this Act using other appropriations available for that
302	322		purpose.
303		-	SECTION 7. The Texas Economic Development Bank is required
	323	+	SECTION 8. The Texas Economic Development Bank is required
304	324		to implement a provision of this Act only if the legislature
305	325		appropriates money specifically for that purpose. If the
306	326		legislature does not appropriate money specifically for that
307	327		purpose, the bank may, but is not required to, implement a provision
308	328		of this Act using other appropriations available for that purpose.
309		-	SECTION 8. The attorney general is required to implement a
	329	+	SECTION 9. The attorney general is required to implement a
310	330		provision of this Act only if the legislature appropriates money
311	331		specifically for that purpose. If the legislature does not
312	332		appropriate money specifically for that purpose, the attorney
313	333		general may, but is not required to, implement a provision of this
314	334		Act using other appropriations available for that purpose.
315		-	SECTION 9. This Act takes effect immediately if it ~~receives~~
316		-	a vote of two-thirds of all the members elected to each ~~house, as~~
317		-	provided by Section 39, Article III, Texas Constitution. ~~If this~~
318		-	Act does not receive the vote necessary for immediate ~~effect, this~~
319		-	Act takes effect September 1, 2021.
	335	+	SECTION 10. This Act takes effect immediately if it
	336	+	receives a vote of two-thirds of all the members elected to each
	337	+	house, as provided by Section 39, Article III, Texas Constitution.
	338	+	If this Act does not receive the vote necessary for immediate
	339	+	effect, this Act takes effect September 1, 2021.