SB 4 Analysis       Search Tip  
 1-1                                   AN ACT
 1-2     relating to the administration and use of the Texas Mobility Fund
 1-3     and the issuance of obligations for financing the construction,
 1-4     reconstruction, acquisition, and expansion of state highways and
 1-5     other mobility projects.
 1-6           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-7           SECTION 1.  Chapter 201, Transportation Code, is amended by
 1-8     adding Subchapter M to read as follows:
 1-9             SUBCHAPTER M.  OBLIGATIONS FOR CERTAIN HIGHWAY AND
1-10                              MOBILITY PROJECTS
1-11           Sec. 201.941.  DEFINITIONS.  In this subchapter:
1-12                 (1)  "Comptroller's certification" means:
1-13                       (A)  as to long-term obligations, the
1-14     certification made under Section 201.943(e); and
1-15                       (B)  as to short-term obligations, the
1-16     certification made under Section 201.943(f).
1-17                 (2)  "Credit agreement" has the meaning assigned by
1-18     Section 1371.001, Government Code.
1-19                 (3)  "Fund" means the Texas Mobility Fund.
1-20                 (4)  "Long-term obligations" means an issue or series
1-21     of obligations the latest scheduled maturity of which is more than
1-22     five years.
1-23                 (5)  "Maximum obligation amount" means the maximum
1-24     aggregate principal amount of long-term obligations and short-term
1-25     obligations that the commission may issue from time to time after
 2-1     receipt of the applicable comptroller's certification.
 2-2                 (6)  "Obligations" means bonds, notes, and other public
 2-3     securities.
 2-4                 (7)  "Short-term obligations" means an issue or series
 2-5     of obligations the latest scheduled maturity of which is five years
 2-6     or less.
 2-7           Sec. 201.942.  ADMINISTRATION OF FUND.  The comptroller shall
 2-8     hold the fund, and the commission, through the department, shall
 2-9     manage, invest, use, and administer the fund as provided by this
2-10     subchapter.
2-11           Sec. 201.943.  AUTHORITY TO ISSUE OBLIGATIONS; PURPOSES;
2-12     LIMITATIONS.  (a)  Subject to Subsections (e), (f), and (g), the
2-13     commission by order or resolution may issue obligations in the name
2-14     and on behalf of the state and the department and may enter into
2-15     credit agreements related to the obligations.  The obligations may
2-16     be issued in multiple series and issues from time to time in an
2-17     aggregate amount not exceeding the maximum obligation amount.  The
2-18     obligations may be issued on and may have the terms and provisions
2-19     the commission determines appropriate and in the interests of the
2-20     state.  The obligations may be issued as long-term obligations,
2-21     short-term obligations, or both.  The latest scheduled maturity of
2-22     an issue or series of obligations may not exceed 30 years.
2-23           (b)  Obligations must be secured by and payable from a pledge
2-24     of and lien on all or part of the money in the fund.  Obligations
2-25     may be additionally secured by and payable from credit agreements.
2-26     The commission may pay amounts due on the obligations from
 3-1     discretionary money available to it that is not dedicated to or
 3-2     appropriated for other specific purposes.
 3-3           (c)  The commission may create within the fund accounts,
 3-4     reserves, and subfunds for purposes the commission finds
 3-5     appropriate and necessary in connection with the issuance of
 3-6     obligations.
 3-7           (d)  Obligations may be issued for one or more of the
 3-8     following purposes:
 3-9                 (1)  to pay all or part of the costs of constructing,
3-10     reconstructing, acquiring, and expanding state highways, including
3-11     any necessary design and acquisition of rights-of-way, in the
3-12     manner and locations determined by the commission that, according
3-13     to conclusive findings of the commission, have an expected useful
3-14     life, without material repair, of not less than 10 years;
3-15                 (2)  to provide participation by the state in the
3-16     payment of part of the costs of constructing and providing publicly
3-17     owned toll roads and other public transportation projects that are
3-18     determined by the commission to be in the best interests of the
3-19     state in its major goal of improving the mobility of the residents
3-20     of the state;
3-21                 (3)  to create debt service reserve accounts;
3-22                 (4)  to pay interest on obligations for a period of not
3-23     longer than two years;
3-24                 (5)  to refund or cancel outstanding obligations; and
3-25                 (6)  to pay the commission's costs of issuance.
3-26           (e)  Long-term obligations in the amount proposed to be
 4-1     issued by the commission may not be issued unless the comptroller
 4-2     projects in a comptroller's certification that the amount of money
 4-3     dedicated to the fund pursuant to Section 49-k(e), Article III,
 4-4     Texas Constitution, and required to be on deposit in the fund
 4-5     pursuant to Section 49-k(f), Article III, Texas Constitution, and
 4-6     the investment earnings on that money, during each year of the
 4-7     period during which the proposed obligations are scheduled to be
 4-8     outstanding will be equal to at least 110 percent of the
 4-9     requirements to pay the principal of and interest on the proposed
4-10     long-term obligations during that year.
4-11           (f)  Short-term obligations in the amount proposed by the
4-12     commission may not be issued unless the comptroller, in a
4-13     comptroller's certification:
4-14                 (1)  assumes that the short-term obligations will be
4-15     refunded and refinanced to mature over a 20-year period with level
4-16     principal requirements and bearing interest at then current market
4-17     rates, as determined by the comptroller; and
4-18                 (2)  projects that the amount of money dedicated to the
4-19     fund pursuant to Section 49-k(e), Article III, Texas Constitution,
4-20     and required to be on deposit in the fund pursuant to Section
4-21     49-k(f), Article III, Texas Constitution, and the investment
4-22     earnings on that money, during each year of the assumed 20-year
4-23     period will be equal to at least 110 percent of the requirements to
4-24     pay the principal of and interest on the proposed refunding
4-25     obligations during that year.
4-26           (g)  The commission may agree to further restrictions in
 5-1     connection with the issuance of obligations and may retain
 5-2     independent professional consultants to make projections in
 5-3     addition to, but not instead of, those of the comptroller if
 5-4     required as a prerequisite to the issuance of the obligations.
 5-5           (h)  The commission has all powers necessary or appropriate
 5-6     to carry out this subchapter and to implement Section 49-k, Article
 5-7     III, Texas Constitution, including the powers granted to other
 5-8     bond-issuing governmental agencies and units and to nonprofit
 5-9     corporations by Chapters 1201, 1207, and 1371, Government Code.
5-10           (i)  As required by Section 49-k(h), Article III, Texas
5-11     Constitution, proceedings authorizing obligations and related
5-12     credit agreements to be issued and executed under this subchapter
5-13     shall be submitted to the attorney general for approval as to their
5-14     legality.  If the attorney general finds that they will be issued
5-15     in accordance with this subchapter and other applicable law, the
5-16     attorney general shall approve them, and, after payment by the
5-17     purchasers of the obligations in accordance with the terms of sale
5-18     and after execution and delivery of the related credit agreements,
5-19     the obligations and related credit agreements are incontestable for
5-20     any cause.
5-21           (j)  A comptroller's certification under this section must be
5-22     based on economic data, forecasting methods, and projections that
5-23     the comptroller determines are reliable.
5-24           (k)  The holders of obligations and the counterparties to
5-25     credit agreements have the rights granted in Section 49-k(j),
5-26     Article III, Texas Constitution.
 6-1           Sec. 201.944.  PLEDGE OF STATE'S FULL FAITH AND CREDIT.
 6-2     (a)  The commission may guarantee on behalf of the state the
 6-3     payment of any obligations and credit agreements issued under
 6-4     Section 201.943 by pledging the full faith and credit of the state
 6-5     to the payment of the obligations and credit agreements in the
 6-6     event the revenue and money dedicated to the fund pursuant to
 6-7     Section 49-k(e), Article III, Texas Constitution, and on deposit in
 6-8     the fund pursuant to Section 49-k(f), Article III, Texas
 6-9     Constitution, are insufficient for that purpose.
6-10           (b)  The exercise of the authority granted by Subsection (a)
6-11     does not modify or relieve the commission from complying with
6-12     Section 201.943(e) or (f) and does not permit the issuance of
6-13     aggregate obligations in an amount exceeding the maximum obligation
6-14     amount.
6-15           (c)  If the commission exercises the authority granted by
6-16     Subsection (a), the constitutional appropriation contained in
6-17     Section 49-k(g), Article III, Texas Constitution, shall be
6-18     implemented and observed by all officers of the state during any
6-19     period during which obligations and credit agreements are
6-20     outstanding and unpaid.
6-21           Sec. 201.945.  DEDICATION OF REVENUE TO FUND.  Annually, the
6-22     revenue of the state that is dedicated or appropriated to the fund
6-23     pursuant to Section 49-k(e), Article III, Texas Constitution, shall
6-24     be deposited to the fund in accordance with Section 49-k(f),
6-25     Article III, Texas Constitution.
6-26           Sec. 201.946.  INVESTMENT AND USES OF MONEY IN FUND.
 7-1     (a)  Money in the fund may be invested in the investments permitted
 7-2     by law for the investment of money on deposit in the state highway
 7-3     fund.
 7-4           (b)  As a part of its covenants and commitments made in
 7-5     connection with the issuance of obligations and the execution of
 7-6     credit agreements, the commission may limit the types of
 7-7     investments eligible for investment of money in the fund but may
 7-8     not expand the types of investments to include any investments that
 7-9     are not authorized by Subsection (a).
7-10           (c)  Income received from the investment of money in the fund
7-11     shall be deposited in the fund, subject to requirements that may be
7-12     imposed by the proceedings authorizing obligations to protect the
7-13     tax-exempt status of interest payable on the obligations under the
7-14     Internal Revenue Code of 1986.
7-15           (d)  To the extent money is on deposit in the fund in amounts
7-16     that are in excess of the money required by the proceedings
7-17     authorizing the obligations and credit agreements to be retained on
7-18     deposit, the commission may use the money for any purpose for which
7-19     obligations may be issued under this subchapter.
7-20           Sec. 201.947.  STRATEGIC PLAN.  The commission may not issue
7-21     obligations under this subchapter before the department has
7-22     developed a strategic plan that outlines how the money will be used
7-23     and the benefit the state will derive from use of money in the
7-24     fund.
7-25           SECTION 2.  (a)  This Act takes effect:
7-26                 (1)  on the date on which the constitutional amendment
 8-1     proposed by Senate Joint Resolution No. 16, 77th Legislature,
 8-2     Regular Session, 2001, takes effect; and
 8-3                 (2)  only if Senate Bill No. 342, 77th Legislature,
 8-4     Regular Session, 2001, is enacted and becomes law.
 8-5           (b)  If the constitutional amendment proposed by Senate Joint
 8-6     Resolution No. 16 is not approved by the voters or if Senate Bill
 8-7     No. 342 does not become law, this Act has no effect.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 4 passed the Senate on
         March 15, 2001, by a viva-voce vote; and that the Senate concurred
         in House amendments on May 24, 2001, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 4 passed the House, with
         amendments, on May 17, 2001, by a non-record vote.
                                             _______________________________
                                                Chief Clerk of the House
         Approved:
         _______________________________
                      Date
         _______________________________
                    Governor
SB 4 Analysis 
 

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