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SB 4 Analysis 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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This Page Last Updated: Tuesday March 14, 2017